Illya Gerasymchuk | Financial Markets, Macro, Bitcoin & Commodities

Navigating the world of DeFi without a deep understanding of the economic and monetary theory is…

hello@illya.sh (Illya Gerasymchuk) — Sun, 05 Mar 2023 22:20:19 +0000

Navigating the world of DeFi without a deep understanding of the economic and monetary theory is akin to navigating an unknown city without a map. Just because the buildings are made of the same material as in your hometown, doesn't mean you'll find your way through #DeFi #crypto

Saying that Silvergate represents crypto is like saying that you represent the US Dollar, because…

hello@illya.sh (Illya Gerasymchuk) — Fri, 10 Mar 2023 21:05:56 +0000

Saying that Silvergate represents crypto is like saying that you represent the US Dollar, because you have them in your wallet.

Not a single DEX collapsed for the same reasons. DeFi is building the best financial system in history.

#bitcoin #crypto #defi #dex

🚨 $USDC trading below $USD and $USDT above $USD

hello@illya.sh (Illya Gerasymchuk) — Sat, 11 Mar 2023 01:23:50 +0000

🚨 $USDC trading below $USD and $USDT above $USD

Looks like everyone is swapping $USDC for $USDT because of #SVB collapse

🚨 $USDT reserves at #Curve are almost depleted, with less than 4% of it remaining in the #3pool

hello@illya.sh (Illya Gerasymchuk) — Sat, 11 Mar 2023 01:47:28 +0000

🚨 $USDT reserves at #Curve are almost depleted, with less than 4% of it remaining in the #3pool

This is another sign of massive swapping of $USDC for $USDT, due to the collapse of #SVB

$USDC depegging is on the horizon!

🚨📈 Mass $USDC to $USDT swapping has caused $BUSD to fall below $USDT by more than 1%

hello@illya.sh (Illya Gerasymchuk) — Sat, 11 Mar 2023 02:02:15 +0000

🚨📈 Mass $USDC to $USDT swapping has caused $BUSD to fall below $USDT by more than 1%

As $USDT reserves across #DEX are depleting, it's also affecting #CEX like #Binance

This is a result of the collapse of the Silicon Valley Bank, where $USDC has reserves

🚨📈 $USDT reserves at #Curve's #3pool dropped below 3%!!

hello@illya.sh (Illya Gerasymchuk) — Sat, 11 Mar 2023 02:14:35 +0000

🚨📈 $USDT reserves at #Curve's #3pool dropped below 3%!!

This is the reason why $BUSD is trading below $USDT at #Binance

It's caused by mass swap of $USDC to $USDT across the DEXes. Same happening on #Uniswap

🚨📈 $USDT reserves at the $USDC / $USDT 0.01% pool on #Uniswap are depleted 😳

hello@illya.sh (Illya Gerasymchuk) — Sat, 11 Mar 2023 02:26:36 +0000

🚨📈 $USDT reserves at the $USDC / $USDT 0.01% pool on #Uniswap are depleted 😳

This indicates a massive $USDC liquidation.

A lot of news saying that $USDC is safe despite #SVB collapse, but the market seems be saying otherwise…

🚨📈 $USDT reserves are depleting across all #DEX pools that have $USDC.

hello@illya.sh (Illya Gerasymchuk) — Sat, 11 Mar 2023 02:33:59 +0000

🚨📈 $USDT reserves are depleting across all #DEX pools that have $USDC.

It's not just the #3pool on #Curve, #SUSD pool is in the same situation.

This is a result of massive liquidation of $USDC, due to SVB's collapse.

The depegging seems to be more likely by the minute 😳

🚨📈 $USDC is the 2nd smart contract with the most gas usage on #Ethereum, second only to #Uniswap

hello@illya.sh (Illya Gerasymchuk) — Sat, 11 Mar 2023 02:58:59 +0000

🚨📈 $USDC is the 2nd smart contract with the most gas usage on #Ethereum, second only to #Uniswap

$USDT is 4th, since massive swapping from $USDC to $USDT is taking across all pools in #DEX

Depegging of $USDC can lead to the collapse of other #stablecoins and #crypto prices

🚨🔥 Over $1.5 billion $USDC have been burned in the last 8 hours

hello@illya.sh (Illya Gerasymchuk) — Sat, 11 Mar 2023 03:48:34 +0000

🚨🔥 Over $1.5 billion $USDC have been burned in the last 8 hours

🚨📈 $USDT liquidity on #DEX pools decreased to almost ZERO, while $USDC liquidity almost doubled

hello@illya.sh (Illya Gerasymchuk) — Sat, 11 Mar 2023 04:02:23 +0000

🚨📈 $USDT liquidity on #DEX pools decreased to almost ZERO, while $USDC liquidity almost doubled

This is a result of mass swapping of $USDC for $USDT

🚨📈 $USDT APY on #AAVE is 60%

hello@illya.sh (Illya Gerasymchuk) — Sun, 12 Mar 2023 04:13:49 +0000

🚨📈 $USDT APY on #AAVE is 60%

This means that people are shorting $USDT. The market sentiment is that $USDT is overpriced.

How to profit:
1. Short $USDT
2. Lend $USDT for a high APR. Should last until Monday
3. Do both

This happened because of the depeg of $USDC

🚨📈Bank failures will NOT drive $BTC price up

hello@illya.sh (Illya Gerasymchuk) — Sun, 12 Mar 2023 15:54:47 +0000

🚨📈Bank failures will NOT drive $BTC price up

Most of crypto is financed by DEBT

As banks like SVB are failing, both the stock market and crypto prices will fall on Monday

How to profit:
1️⃣ Short #crypto
2️⃣ Buy #gold
3️⃣ Swap crypto for gold

🚨 $PAXG is trading at an $80 premium over gold

hello@illya.sh (Illya Gerasymchuk) — Sun, 12 Mar 2023 19:28:20 +0000

🚨 $PAXG is trading at an $80 premium over gold

The market sentiment is clear: there is a run from #crypto into #gold

Selling your cryptocurrency for $PAXG is a good hedge against both, #Bitcoin and $USD

You can always buy it back for a profit after

Failing banks will tank price of #Bitcoin down with them, because most of money in Bitcoin are…

hello@illya.sh (Illya Gerasymchuk) — Sun, 12 Mar 2023 20:32:07 +0000

Failing banks will tank price of #Bitcoin down with them, because most of money in Bitcoin are loans from those same banks

🚨 Despite the Goldman Sachs's statement regarding rate hikes and bank bailouts, currently the…

hello@illya.sh (Illya Gerasymchuk) — Mon, 13 Mar 2023 04:12:06 +0000

🚨 Despite the Goldman Sachs's statement regarding rate hikes and bank bailouts, currently the market is fully expecting a rate hike by 25bps

Although things may change, specially with the Biden's speech

In either case, QE is not yet back, so no bull market for #Bitcoin

🚨📈 The failure and the bailout of $SVB and $SIVB has shifted the market's sentiment towards the…

hello@illya.sh (Illya Gerasymchuk) — Mon, 13 Mar 2023 04:36:51 +0000

🚨📈 The failure and the bailout of $SVB and $SIVB has shifted the market's sentiment towards the #FED Funds Rate

A rate hike now seems less likely

🚀 #Bitcoin #BullMarket CONFIRMED

hello@illya.sh (Illya Gerasymchuk) — Mon, 13 Mar 2023 17:47:42 +0000

🚀 #Bitcoin #BullMarket CONFIRMED

🚨 You MUST unfollow every single person saying that Bitcoin and #crypto entered a bull market, because they have no idea what they are talking about

➡️I challenge anyone to show me a single sign of reversal. There is none #TA

🚨📈A bounce back into the upper part of the previous weekly rectangle is NOT a #BulMarket signal

hello@illya.sh (Illya Gerasymchuk) — Mon, 13 Mar 2023 17:57:21 +0000

🚨📈A bounce back into the upper part of the previous weekly rectangle is NOT a #BulMarket signal

#Bitcoin will fall back down. So will the rest of the #crypto. Lower than previously

Prepare your #shorts

🚨📈 FIRST INDICATION OF #CRYPTO DOWNTREND

hello@illya.sh (Illya Gerasymchuk) — Wed, 15 Mar 2023 00:56:57 +0000

🚨📈 FIRST INDICATION OF #CRYPTO DOWNTREND

$ETH supply APY at 3% on #AAVE, the highest value this month

🩳The market is starting to short $ETH

💡REMINDER: Unfollow everyone saying that #Bitcoin is in a #BullMarket, as they have no idea what they are talking about

🚨📈 #Crypto DOWN‼️

hello@illya.sh (Illya Gerasymchuk) — Wed, 15 Mar 2023 16:29:09 +0000

🚨📈 #Crypto DOWN‼️

Exactly as I pointed out yesterday

💡Markets are very easy to predict, you just have to listen at what they're saying

Always remember: #DeFi on-chain data is your friend

🚀 The Bitcoin Ordinal Protocol Explained: an innovation which allows for tracking, trading, and…

hello@illya.sh (Illya Gerasymchuk) — Wed, 10 May 2023 15:31:07 +0000

🚀 The Bitcoin Ordinal Protocol Explained: an innovation which allows for tracking, trading, and collecting digital assets on the Bitcoin network!

⚡️Powers BRC20 & SBC20

💥 Let's dive into this fascinating protocol and explore its significance Blockchain Crypto
(a thread 🧵)

🤔 What is Ordinal Theory? It's a protocol for assigning serial numbers to satoshis, the smallest…

hello@illya.sh (Illya Gerasymchuk) — Wed, 10 May 2023 15:31:09 +0000

🤔 What is Ordinal Theory? It's a protocol for assigning serial numbers to satoshis, the smallest unit of a bitcoin, and tracking their transactions. Imagine giving each satoshi a unique identity, like a collectible item! 💎🔗

📖 Quoted from 2023-05-10 16:31
https://illya.sh/thoughts/the-bitcoin-ordinal-protocol-explained-an-innovation-which
🚀 The Bitcoin Ordinal Protocol Explained: an innovation which allows for tracking, trading, and collecting digital assets on the Bitcoin network!

⚡️Powers BRC20 & SBC20

💥 Let's dive into this fascinating protocol and explore its significance Blockchain Crypto
(a thread 🧵)

🛠 Does Ordinal Theory require a side chain, separate token, or changes to Bitcoin? NO! It works…

hello@illya.sh (Illya Gerasymchuk) — Wed, 10 May 2023 15:31:09 +0000

🛠 Does Ordinal Theory require a side chain, separate token, or changes to Bitcoin? NO! It works right now with only bitcoin as the token, making it a seamless addition to the ecosystem.🌱🔄

📖 Quoted from 2023-05-10 16:31
https://illya.sh/thoughts/what-is-ordinal-theory-its-a-protocol-for-assigning-serial
🤔 What is Ordinal Theory? It's a protocol for assigning serial numbers to satoshis, the smallest unit of a bitcoin, and tracking their transactions. Imagine giving each satoshi a unique identity, like a collectible item! 💎🔗

🔑 The power of Ordinal Theory: Collecting, trading, and scheming!🤝 By assigning identities to…

hello@illya.sh (Illya Gerasymchuk) — Wed, 10 May 2023 15:31:10 +0000

🔑 The power of Ordinal Theory: Collecting, trading, and scheming!🤝 By assigning identities to satoshis, they become individually trackable and tradable for numismatic value. Plus, it enables inscriptions: a protocol to attach content to satoshis! 🎨🔐

📖 Quoted from 2023-05-10 16:31
https://illya.sh/thoughts/what-is-ordinal-theory-its-a-protocol-for-assigning-serial
🛠 Does Ordinal Theory require a side chain, separate token, or changes to Bitcoin? NO! It works right now with only bitcoin as the token, making it a seamless addition to the ecosystem.🌱🔄

🧩 How does it work? Ordinal numbers are assigned to satoshis as they're mined. A simple algorithm…

hello@illya.sh (Illya Gerasymchuk) — Wed, 10 May 2023 15:31:11 +0000

🧩 How does it work? Ordinal numbers are assigned to satoshis as they're mined. A simple algorithm is used to determine how satoshis move from inputs to outputs in transactions, maintaining their unique identities. 💹🔀

📖 Quoted from 2023-05-10 16:31
https://illya.sh/thoughts/the-power-of-ordinal-theory-collecting-trading-and-scheming
🔑 The power of Ordinal Theory: Collecting, trading, and scheming!🤝 By assigning identities to satoshis, they become individually trackable and tradable for numismatic value. Plus, it enables inscriptions: a protocol to attach content to satoshis! 🎨🔐

⚠️ The key differences between Ordinal Theory's inscriptions and Ethereum NFTs:

hello@illya.sh (Illya Gerasymchuk) — Wed, 10 May 2023 15:31:12 +0000

⚠️ The key differences between Ordinal Theory's inscriptions and Ethereum NFTs:

- Inscriptions are always immutable🔏
- Content is always on-chain💾
- Inscriptions are simpler and more secure🛡️
- They're scarcer, unlocking new markets💰

📖 Quoted from 2023-05-10 16:31
https://illya.sh/thoughts/how-does-it-work-ordinal-numbers-are-assigned-to-satoshis-as
🧩 How does it work? Ordinal numbers are assigned to satoshis as they're mined. A simple algorithm is used to determine how satoshis move from inputs to outputs in transactions, maintaining their unique identities. 💹🔀

🧪 Comparisons to other platforms: Ordinal Protocol has been designed specifically for digital…

hello@illya.sh (Illya Gerasymchuk) — Wed, 10 May 2023 15:31:13 +0000

🧪 Comparisons to other platforms: Ordinal Protocol has been designed specifically for digital artifacts, offering a simpler and more polished user experience compared to second-layer asset protocols like RGB and Taro. 🖼️🌟

📖 Quoted from 2023-05-10 16:31
https://illya.sh/thoughts/the-key-differences-between-ordinal-theorys-inscriptions-and
⚠️ The key differences between Ordinal Theory's inscriptions and Ethereum NFTs:

- Inscriptions are always immutable🔏
- Content is always on-chain💾
- Inscriptions are simpler and more secure🛡️
- They're scarcer, unlocking new markets💰

👩‍🎨 Why inscriptions matter for artists: They're on Bitcoin (high status), have cheaper on-chain…

hello@illya.sh (Illya Gerasymchuk) — Wed, 10 May 2023 15:31:14 +0000

👩‍🎨 Why inscriptions matter for artists: They're on Bitcoin (high status), have cheaper on-chain storage, unlock new liquidity, and are designed specifically for digital artifacts. This offers unique advantages compared to other NFT platforms. 🎭🚀

📖 Quoted from 2023-05-10 16:31
https://illya.sh/thoughts/comparisons-to-other-platforms-ordinal-protocol-has-been
🧪 Comparisons to other platforms: Ordinal Protocol has been designed specifically for digital artifacts, offering a simpler and more polished user experience compared to second-layer asset protocols like RGB and Taro. 🖼️🌟

🌍 In conclusion, the Ordinal Protocol on Bitcoin opens up new possibilities for tracking, trading,…

hello@illya.sh (Illya Gerasymchuk) — Wed, 10 May 2023 15:31:15 +0000

🌍 In conclusion, the Ordinal Protocol on Bitcoin opens up new possibilities for tracking, trading, and collecting satoshis, as well as creating digital artifacts. It's a valuable addition to the blockchain ecosystem! 🌟🌊

📖 Quoted from 2023-05-10 16:31
https://illya.sh/thoughts/why-inscriptions-matter-for-artists-theyre-on-bitcoin-high
👩‍🎨 Why inscriptions matter for artists: They're on Bitcoin (high status), have cheaper on-chain storage, unlock new liquidity, and are designed specifically for digital artifacts. This offers unique advantages compared to other NFT platforms. 🎭🚀

What if I told you that Bitcoin is not just about money, but it can also store arbitrary data?

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:31 +0000

What if I told you that Bitcoin is not just about money, but it can also store arbitrary data?

In this thread I will explain in detail the fascinating world of Ordinals and Inscriptions, where individual satoshis become more than just digital currency

🧠 Ordinal Theory assigns serial numbers to satoshis, the smallest unit of Bitcoin. These ordinal…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:34 +0000

🧠 Ordinal Theory assigns serial numbers to satoshis, the smallest unit of Bitcoin. These ordinal numbers are assigned in the order satoshis are mined, giving each a unique identity and opening the door to a world of possibilities

📖 Quoted from 2023-05-17 19:39
https://illya.sh/thoughts/what-if-i-told-you-that-bitcoin-is-not-just-about-money-but
What if I told you that Bitcoin is not just about money, but it can also store arbitrary data?

In this thread I will explain in detail the fascinating world of Ordinals and Inscriptions, where individual satoshis become more than just digital currency

📝 An inscription is an arbitrary piece of data attached to an individual satoshi, transforming it…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:36 +0000

📝 An inscription is an arbitrary piece of data attached to an individual satoshi, transforming it into a Bitcoin-native digital artifact. It's like a digital signature, representing something unique and valuable

📖 Quoted from 2023-05-17 19:39
https://illya.sh/thoughts/ordinal-theory-assigns-serial-numbers-to-satoshis-the
🧠 Ordinal Theory assigns serial numbers to satoshis, the smallest unit of Bitcoin. These ordinal numbers are assigned in the order satoshis are mined, giving each a unique identity and opening the door to a world of possibilities

🔍 We can track a single satoshi using these inscriptions. This allows us to trace its journey…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:39 +0000

🔍 We can track a single satoshi using these inscriptions. This allows us to trace its journey across transactions, from one taproot address to another. The first satoshi of the first output becomes the vessel for the inscription

📖 Quoted from 2023-05-17 19:39
https://illya.sh/thoughts/an-inscription-is-an-arbitrary-piece-of-data-attached-to-an
📝 An inscription is an arbitrary piece of data attached to an individual satoshi, transforming it into a Bitcoin-native digital artifact. It's like a digital signature, representing something unique and valuable

🌱 Taproot addresses play a crucial role in enabling inscriptions. They leverage the power of the…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:40 +0000

🌱 Taproot addresses play a crucial role in enabling inscriptions. They leverage the power of the Taproot upgrade on the Bitcoin blockchain, providing the necessary flexibility to store arbitrary content within a transaction

📖 Quoted from 2023-05-17 19:39
https://illya.sh/thoughts/we-can-track-a-single-satoshi-using-these-inscriptions-this
🔍 We can track a single satoshi using these inscriptions. This allows us to trace its journey across transactions, from one taproot address to another. The first satoshi of the first output becomes the vessel for the inscription

🗂️ So, how does arbitrary data get stored on the Bitcoin blockchain using ordinals? Inscription…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:40 +0000

🗂️ So, how does arbitrary data get stored on the Bitcoin blockchain using ordinals? Inscription content is serialized and included in the input of a reveal transaction, giving life to new forms of digital artifacts

📖 Quoted from 2023-05-17 19:39
https://illya.sh/thoughts/taproot-addresses-play-a-crucial-role-in-enabling
🌱 Taproot addresses play a crucial role in enabling inscriptions. They leverage the power of the Taproot upgrade on the Bitcoin blockchain, providing the necessary flexibility to store arbitrary content within a transaction

🔒 When an address becomes the owner of an inscription on the Bitcoin blockchain, it gains the…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:41 +0000

🔒 When an address becomes the owner of an inscription on the Bitcoin blockchain, it gains the ability to transfer that inscription. This ownership is secured and verified by the Bitcoin network itself

📖 Quoted from 2023-05-17 19:39
https://illya.sh/thoughts/taproot-addresses-play-a-crucial-role-in-enabling
🗂️ So, how does arbitrary data get stored on the Bitcoin blockchain using ordinals? Inscription content is serialized and included in the input of a reveal transaction, giving life to new forms of digital artifacts

🛠️ Meet the ord tool! It serves as an index, block explorer, and wallet for exploring the world of…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:43 +0000

🛠️ Meet the ord tool! It serves as an index, block explorer, and wallet for exploring the world of inscriptions. With ord, you can generate, manage, and interact with your own inscriptions on the Bitcoin blockchain

📖 Quoted from 2023-05-17 19:39
https://illya.sh/thoughts/when-an-address-becomes-the-owner-of-an-inscription-on-the
🔒 When an address becomes the owner of an inscription on the Bitcoin blockchain, it gains the ability to transfer that inscription. This ownership is secured and verified by the Bitcoin network itself

🖼️ Inscriptions demonstrate the versatility of the Bitcoin blockchain, enabling storage of…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:44 +0000

🖼️ Inscriptions demonstrate the versatility of the Bitcoin blockchain, enabling storage of arbitrary data. From artwork to text, the possibilities are endless. Ordinal Theory opens new avenues for creativity and innovation on the blockchain.

📖 Quoted from 2023-05-17 19:39
https://illya.sh/thoughts/meet-the-ord-tool-it-serves-as-an-index-block-explorer-and
🛠️ Meet the ord tool! It serves as an index, block explorer, and wallet for exploring the world of inscriptions. With ord, you can generate, manage, and interact with your own inscriptions on the Bitcoin blockchain

🎯 Keep in mind that transaction fees and the size of the inscription can affect costs. As the…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:45 +0000

🎯 Keep in mind that transaction fees and the size of the inscription can affect costs. As the inscription size increases, so does the transaction size, potentially impacting fees required for inclusion in a block

📖 Quoted from 2023-05-17 19:39
https://illya.sh/thoughts/inscriptions-demonstrate-the-versatility-of-the-bitcoin
🖼️ Inscriptions demonstrate the versatility of the Bitcoin blockchain, enabling storage of arbitrary data. From artwork to text, the possibilities are endless. Ordinal Theory opens new avenues for creativity and innovation on the blockchain.

📚 Remember, inscriptions are still an experimental feature, so exercise caution when working with…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 18:39:46 +0000

📚 Remember, inscriptions are still an experimental feature, so exercise caution when working with them

🚀 Debunking a common misconception in the Crypto world: BRC-20 superiority over ERC-20

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 22:43:40 +0000

🚀 Debunking a common misconception in the Crypto world: BRC-20 superiority over ERC-20

If you've heard BRC-20 is better, let's dive into some facts that might make you rethink that claim

🤔 It's crucial to understand what these tokens are. BRC-20 is essentially a piece of text, whereas…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 22:43:41 +0000

🤔 It's crucial to understand what these tokens are. BRC-20 is essentially a piece of text, whereas ERC-20 is a computer program. BRC-20's capabilities are limited to inscription on the blockchain. ERC-20, on the other hand, allows encoding of any execution logic

📖 Quoted from 2023-05-17 23:43
https://illya.sh/thoughts/debunking-a-common-misconception-in-the-crypto-world-brc-20
🚀 Debunking a common misconception in the Crypto world: BRC-20 superiority over ERC-20

If you've heard BRC-20 is better, let's dive into some facts that might make you rethink that claim

📝 With BRC-20, there are no numeric balances. Instead, you need to parse everything from the text.…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 22:43:42 +0000

📝 With BRC-20, there are no numeric balances. Instead, you need to parse everything from the text. In contrast, ERC-20 gives each address an integer balance, simplifying and enforcing the proper handling of assets

📖 Quoted from 2023-05-17 23:43
https://illya.sh/thoughts/its-crucial-to-understand-what-these-tokens-are-brc-20-is
🤔 It's crucial to understand what these tokens are. BRC-20 is essentially a piece of text, whereas ERC-20 is a computer program. BRC-20's capabilities are limited to inscription on the blockchain. ERC-20, on the other hand, allows encoding of any execution logic

🪙 BRC-20 doesn't limit the minting of tokens. There is no way of knowing wether a token has been…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 22:43:42 +0000

🪙 BRC-20 doesn't limit the minting of tokens. There is no way of knowing wether a token has been fully minted without parsing every “mint” text record. Conversely, ERC-20 ensures that only a predetermined amount of a token can exist, providing a more controlled ecosystem.

📖 Quoted from 2023-05-17 23:43
https://illya.sh/thoughts/with-brc-20-there-are-no-numeric-balances-instead-you-need
📝 With BRC-20, there are no numeric balances. Instead, you need to parse everything from the text. In contrast, ERC-20 gives each address an integer balance, simplifying and enforcing the proper handling of assets

🚧 Contrary to popular belief, BRC-20 isn't fully on the Bitcoin blockchain. Yes, the text is…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 22:43:43 +0000

🚧 Contrary to popular belief, BRC-20 isn't fully on the Bitcoin blockchain. Yes, the text is stored as part of Taproot Bitcoin transactions, but Bitcoin isn't aware of BRC-20s. You need an external, off-chain tool to parse and calculate balances

📖 Quoted from 2023-05-17 23:43
https://illya.sh/thoughts/with-brc-20-there-are-no-numeric-balances-instead-you-need
🪙 BRC-20 doesn't limit the minting of tokens. There is no way of knowing wether a token has been fully minted without parsing every “mint” text record. Conversely, ERC-20 ensures that only a predetermined amount of a token can exist, providing a more controlled ecosystem.

🛠️ Any DeFi ecosystem built around BRC-20 will need off-chain tools. This requirement brings in a…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 22:43:44 +0000

🛠️ Any DeFi ecosystem built around BRC-20 will need off-chain tools. This requirement brings in a level of centralization and potential vulnerability. On the other hand, with ERC-20, everything is fully stored and operated on the blockchain

📖 Quoted from 2023-05-17 23:43
https://illya.sh/thoughts/contrary-to-popular-belief-brc-20-isnt-fully-on-the-bitcoin
🚧 Contrary to popular belief, BRC-20 isn't fully on the Bitcoin blockchain. Yes, the text is stored as part of Taproot Bitcoin transactions, but Bitcoin isn't aware of BRC-20s. You need an external, off-chain tool to parse and calculate balances

🚀 BRC-20 is also less efficient than ERC-20. Any mildly complex system built around BRC-20 heavily…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 22:43:45 +0000

🚀 BRC-20 is also less efficient than ERC-20. Any mildly complex system built around BRC-20 heavily relies on caching. In contrast, ERC-20 is extremely efficient, cryptographically protected, and operates seamlessly on the blockchain

📖 Quoted from 2023-05-17 23:43
https://illya.sh/thoughts/any-defi-ecosystem-built-around-brc-20-will-need-off-chain
🛠️ Any DeFi ecosystem built around BRC-20 will need off-chain tools. This requirement brings in a level of centralization and potential vulnerability. On the other hand, with ERC-20, everything is fully stored and operated on the blockchain

📚 A detailed explanation of what BRC-20 are and how they work can be found on this thread:

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 22:43:45 +0000

📚 A detailed explanation of what BRC-20 are and how they work can be found on this thread:

https://illya.sh/threads/@1684348771-1.html

BRC20 Ordinals Inscriptions Bitcoin

📖 Quoted from 2023-05-17 23:43
https://illya.sh/thoughts/brc-20-is-also-less-efficient-than-erc-20-any-mildly-complex
🚀 BRC-20 is also less efficient than ERC-20. Any mildly complex system built around BRC-20 heavily relies on caching. In contrast, ERC-20 is extremely efficient, cryptographically protected, and operates seamlessly on the blockchain

🌐 In conclusion, it's essential to understand the technical and operational differences between…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 May 2023 22:43:46 +0000

🌐 In conclusion, it's essential to understand the technical and operational differences between BRC-20 and ERC-20. While the ecosystem around BRC-20 will continue to evolve, it is unlikely that it will supersede smart-contract based DeFi

📖 Quoted from 2023-05-17 23:43
https://illya.sh/thoughts/brc-20-is-also-less-efficient-than-erc-20-any-mildly-complex
📚 A detailed explanation of what BRC-20 are and how they work can be found on this thread:

https://illya.sh/threads/@1684348771-1.html

BRC20 Ordinals Inscriptions Bitcoin

Unlock the secret to predicting any asset's price! The 30-day federal funds rate futures contract…

hello@illya.sh (Illya Gerasymchuk) — Tue, 15 Aug 2023 23:18:41 +0000

Unlock the secret to predicting any asset's price! The 30-day federal funds rate futures contract on the Chicago Mercantile Exchange is the key. Learn how to use this unique indicator for profitable trading in this video. #Trading #Investing #Cryptocurrency #Futures

🤯 Zero-Knowledge cryptography is how the blockchain will connect to the outside world. As the ZK…

hello@illya.sh (Illya Gerasymchuk) — Thu, 26 Oct 2023 18:55:53 +0000

🤯 Zero-Knowledge cryptography is how the blockchain will connect to the outside world. As the ZK field matures, so will the blockchain use cases. Two computation models that were meant for each other.

#zk #blockchain #evm #crypto #mina #Bitcoin #smartcontracts

If you only understood how cheap gold is now. To put it in perspective, its current FIAT price…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Dec 2023 23:23:39 +0000

If you only understood how cheap gold is now. To put it in perspective, its current FIAT price only reflects inflation prior to 2011 🤯

Any direct or indirect inflation following that time period has not yet been accounted for

You don't have to trust me. Trust the price action

I'm not fanboying. Once you think deeply about it will all make sense

hello@illya.sh (Illya Gerasymchuk) — Fri, 29 Dec 2023 18:27:34 +0000

I'm not fanboying. Once you think deeply about it will all make sense

#ZKP #Web3

The negative connotation associated with 'weirdness' is a product of insecurity and fragile ego.

hello@illya.sh (Illya Gerasymchuk) — Fri, 29 Dec 2023 21:54:40 +0000

The negative connotation associated with 'weirdness' is a product of insecurity and fragile ego.

Always remember: your ego can be trained and developed through deliberate mental and physical effort.

No Tests = No Code

hello@illya.sh (Illya Gerasymchuk) — Fri, 29 Dec 2023 23:03:22 +0000

No Tests = No Code
No Abstracted Tests = No Tests

#DeFi only makes sense with private data. This is infeasible on Ethereum, but trivial on $MINA.

hello@illya.sh (Illya Gerasymchuk) — Fri, 29 Dec 2023 23:44:54 +0000

#DeFi only makes sense with private data. This is infeasible on Ethereum, but trivial on $MINA.

Zero-Knowledge will lead to mass adoption of #DeFi, enabling its Cambrian explosion.

Of course, you can also bridge $MINA to Ethereum. This is by design.

Big things are coming.

🟢 The first battery of tests has just been launched!

hello@illya.sh (Illya Gerasymchuk) — Sat, 30 Dec 2023 15:44:33 +0000

🟢 The first battery of tests has just been launched!

🔵 Authenticated metadata commitments are coming too. This will allow for a cryptographic association between metadata and the geolocation

🟣 Such features are infeasible without the recursive zkSNARK architecture of $MINA

A small insight into the meticulous care that is necessary in designing #DeFi tokens with sound…

hello@illya.sh (Illya Gerasymchuk) — Sat, 06 Jan 2024 00:02:40 +0000

A small insight into the meticulous care that is necessary in designing #DeFi tokens with sound economic value principles ⬇️

Just to re-iterate on this further: the iPhone's 0-click exploit broke the ARM processor's…

hello@illya.sh (Illya Gerasymchuk) — Sat, 06 Jan 2024 11:26:15 +0000

Just to re-iterate on this further: the iPhone's 0-click exploit broke the ARM processor's authentication mechanism for pointers, thus allowing the malware to perform arbitrary signatures of arbitrary pointers, thus breaking their authentication & integrity guarantees http

Extending with a personal thank you 💜

hello@illya.sh (Illya Gerasymchuk) — Sat, 06 Jan 2024 13:07:07 +0000

Extending with a personal thank you 💜

Extending with a personal thank you one more time 💜

hello@illya.sh (Illya Gerasymchuk) — Sat, 06 Jan 2024 13:07:32 +0000

Extending with a personal thank you one more time 💜

A little trip into circular dependencies in TypeScript will make you appreciate Python's local…

hello@illya.sh (Illya Gerasymchuk) — Sun, 07 Jan 2024 19:22:15 +0000

A little trip into circular dependencies in TypeScript will make you appreciate Python's local imports even more

The point of software is to be able to iterate fast. 100% of software can be replaced with…

hello@illya.sh (Illya Gerasymchuk) — Mon, 08 Jan 2024 21:28:46 +0000

The point of software is to be able to iterate fast. 100% of software can be replaced with hardware, but nobody wants to hardcode circuits (except for the #ZK crowd 😄). Iteration is its value proposition

This is why software products that take years to deliver don't make sense

A good software engineer follows the best practices. A great software engineer follows the best…

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Jan 2024 09:55:29 +0000

A good software engineer follows the best practices. A great software engineer follows the best practices which are compatible with the goal, the mission, and the vision. In practice this makes suboptimal architecture acceptable in exchange for flexibility.

Very interesting to see the #BitcoinEFT used as a liquidity exit

hello@illya.sh (Illya Gerasymchuk) — Tue, 23 Jan 2024 17:42:42 +0000

Very interesting to see the #BitcoinEFT used as a liquidity exit

And only a few days ago the supply APY on most FIAT stable coins was over 20% on #AAVE You could mistake this for a bullish sign, in an apparent short of FIAT for #crypto

Always analyze the big picture

Individuality isn't about opposing the majority. It's about thinking for yourself

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Jan 2024 17:35:02 +0000

Individuality isn't about opposing the majority. It's about thinking for yourself

In product, it's not about doing something or avoiding something. It's about doing what increases value, and not doing what diminishes value

It's easy to blame it on the devs or the ecosystem. A fair assessment compares solutions within…

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Jan 2024 08:27:25 +0000

It's easy to blame it on the devs or the ecosystem. A fair assessment compares solutions within the ecosystem. Good, innovate and disruptive solutions? Likely a dev issue. If not - the ecosystem. Remember to take the critical mass into consideration

Great idea! A use-case leveraging one of the unique value-propositions of the verifiable…

hello@illya.sh (Illya Gerasymchuk) — Tue, 30 Jan 2024 14:40:50 +0000

Great idea! A use-case leveraging one of the unique value-propositions of the verifiable computational model offered by Zero-Knowledge Proofs and recursive zkSNARKs

Likewise! Very fun and insightful.

hello@illya.sh (Illya Gerasymchuk) — Thu, 01 Feb 2024 19:28:35 +0000

Likewise! Very fun and insightful.

zkSNARKs & zkSTARKs: Disrupting Verifiable Computation

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:14 +0000

zkSNARKs & zkSTARKs: Disrupting Verifiable Computation

Explore how these #ZeroKnowledge protocols SURPASS the #EVM's model, opening a world of possibilities for #Web3 applications

Deep dive ARTICLE

Let's unravel the key insights

🤔 What makes a computation VERIFIABLE?

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:14 +0000

🤔 What makes a computation VERIFIABLE?

✅ In zkSNARKs & zkSTARKs, provers generate proofs of computations, while verifiers check their correctness
🔒 This model supports PRIVATE inputs, unlike the EVM
🌍 It's not limited to blockchain - zkLocus showcases off-chain use cases

📖 Quoted from 2024-04-13 18:28
https://illya.sh/thoughts/zksnarks-zkstarks-disrupting-verifiable-computation
zkSNARKs & zkSTARKs: Disrupting Verifiable Computation

Explore how these #ZeroKnowledge protocols SURPASS the #EVM's model, opening a world of possibilities for #Web3 applications

Deep dive ARTICLE

Let's unravel the key insights

🚀 zkSNARKs & zkSTARKs offer a Constant Verifiable Computational Model (CVCM)

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:15 +0000

🚀 zkSNARKs & zkSTARKs offer a Constant Verifiable Computational Model (CVCM)

⚡ Verification time is CONSTANT - O(1), regardless of computation complexity

💡 Contrast this with the EVM's Linear VCM (LVCM), where verification grows LINEARLY with instructions - O(n)

📖 Quoted from 2024-04-13 18:28
https://illya.sh/thoughts/zksnarks-zkstarks-disrupting-verifiable-computation
🤔 What makes a computation VERIFIABLE?

✅ In zkSNARKs & zkSTARKs, provers generate proofs of computations, while verifiers check their correctness
🔒 This model supports PRIVATE inputs, unlike the EVM
🌍 It's not limited to blockchain - zkLocus showcases off-chain use cases

🤯 The implications are MASSIVE!

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:16 +0000

🤯 The implications are MASSIVE!

🧪 Mina Protocol blockchain and it's native token $MINA operate on this architecture

📍zkLocus leverages this technology to turn geolocation into a RWA, by enabling private, verifiable and programmable geolocation sharing

📖 Quoted from 2024-04-13 18:28
https://illya.sh/thoughts/zksnarks-zkstarks-offer-a-constant-verifiable-computational
🚀 zkSNARKs & zkSTARKs offer a Constant Verifiable Computational Model (CVCM)

⚡ Verification time is CONSTANT - O(1), regardless of computation complexity

💡 Contrast this with the EVM's Linear VCM (LVCM), where verification grows LINEARLY with instructions - O(n)

♾️ The recursive nature of zkSNARKs & zkSTARKs enables INFINITE SCALABILITY

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:16 +0000

♾️ The recursive nature of zkSNARKs & zkSTARKs enables INFINITE SCALABILITY

🌿 Imagine compressing 1000s of computations into a SINGLE proof
⏰ Verification time remains ~CONSTANT
💰 Gas costs are DRASTICALLY reduced

🔥 This is the power of ZKP! 🔥

Mina Protocol blockchain aces it 💪

📖 Quoted from 2024-04-13 18:28
https://illya.sh/thoughts/the-implications-are-massive
🤯 The implications are MASSIVE!

🧪 Mina Protocol blockchain and it's native token $MINA operate on this architecture

📍zkLocus leverages this technology to turn geolocation into a RWA, by enabling private, verifiable and programmable geolocation sharing

🔍 Let's examine how zkLocus leverages Mina's zkSNARK-based architecture

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:17 +0000

🔍 Let's examine how zkLocus leverages Mina's zkSNARK-based architecture

🌍 Geolocation data becomes a trustless, programmable Real World Asset (RWA)
🌉 zkLocus proofs can be used cross-chain or even off-chain
🎯 It's an "app-specific rollup" on Mina, focusing on its own logic

📖 Quoted from 2024-04-13 18:28
https://illya.sh/thoughts/the-implications-are-massive
♾️ The recursive nature of zkSNARKs & zkSTARKs enables INFINITE SCALABILITY

🌿 Imagine compressing 1000s of computations into a SINGLE proof
⏰ Verification time remains ~CONSTANT
💰 Gas costs are DRASTICALLY reduced

🔥 This is the power of ZKP! 🔥

Mina Protocol blockchain aces it 💪

⏳ Time complexity comparison: EVM vs. zkSNARKs/zkSTARKs

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:17 +0000

⏳ Time complexity comparison: EVM vs. zkSNARKs/zkSTARKs

🧮 Execution: EVM is faster due to simple VM emulation
🔍 Verification: ZK proofs shine with constant O(1) vs. EVM's linear O(n)

💡 This is why ZK L2 solutions are BOOMING on Ethereum!

📖 Quoted from 2024-04-13 18:28
https://illya.sh/thoughts/lets-examine-how-zklocus-leverages-minas-zksnark-based
🔍 Let's examine how zkLocus leverages Mina's zkSNARK-based architecture

🌍 Geolocation data becomes a trustless, programmable Real World Asset (RWA)
🌉 zkLocus proofs can be used cross-chain or even off-chain
🎯 It's an "app-specific rollup" on Mina, focusing on its own logic

🌍 But the potential of zkSNARKs & zkSTARKs goes BEYOND blockchain!

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:18 +0000

🌍 But the potential of zkSNARKs & zkSTARKs goes BEYOND blockchain!

🏥 zkSafeZones: Safeguarding civilians in warzones:

⚖️ Automated on-chain legal compliance
👁️ Privacy-preserving AI surveillance
🧪 Built on zkLocus + Mina Protocol blockchain
⛑️ Proposing to UN and ICRC

📖 Quoted from 2024-04-13 18:28
https://illya.sh/thoughts/lets-examine-how-zklocus-leverages-minas-zksnark-based
⏳ Time complexity comparison: EVM vs. zkSNARKs/zkSTARKs

🧮 Execution: EVM is faster due to simple VM emulation
🔍 Verification: ZK proofs shine with constant O(1) vs. EVM's linear O(n)

💡 This is why ZK L2 solutions are BOOMING on Ethereum!

🔐 The era of PRIVATE, VERIFIABLE, PROGRAMMABLE and TRUSTLESS computation is upon us! 👇

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:19 +0000

🔐 The era of PRIVATE, VERIFIABLE, PROGRAMMABLE and TRUSTLESS computation is upon us! 👇

https://illya.sh/blog/posts/zksnark-zkstark-verifiable-computation-model-blockchain/

📖 Quoted from 2024-04-13 18:28
https://illya.sh/thoughts/but-the-potential-of-zksnarks-zkstarks-goes-beyond
🌍 But the potential of zkSNARKs & zkSTARKs goes BEYOND blockchain!

🏥 zkSafeZones: Safeguarding civilians in warzones:

⚖️ Automated on-chain legal compliance
👁️ Privacy-preserving AI surveillance
🧪 Built on zkLocus + Mina Protocol blockchain
⛑️ Proposing to UN and ICRC

🧠 Adapting to the ZK mindset takes time, but the rewards are IMMENSE

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Apr 2024 17:28:19 +0000

🧠 Adapting to the ZK mindset takes time, but the rewards are IMMENSE

💡 As I discovered building zkLocus, every challenge sparks innovation
🌟 Soon, you'll be engineering groundbreaking solutions effortlessly

🚀 The future of Web3 is BRIGHT with ZeroKnowledge! 🔐🌐💻

📖 Quoted from 2024-04-13 18:28
https://illya.sh/thoughts/the-era-of-private-verifiable-programmable-and-trustless
🔐 The era of PRIVATE, VERIFIABLE, PROGRAMMABLE and TRUSTLESS computation is upon us! 👇

https://illya.sh/blog/posts/zksnark-zkstark-verifiable-computation-model-blockchain/

Ever wondered how zkSNARKs & zkSTARKs ACTUALLY work under the hood? 🤔

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Apr 2024 12:28:35 +0000

Ever wondered how zkSNARKs & zkSTARKs ACTUALLY work under the hood? 🤔

🔐 These ZeroKnowledge protocols offer a novel way to PROVE computations without revealing the computation itself! 🤯

⛓️ Native match with blockchain

(a thread 🧵)

🎯 At their core, zkSNARKs & zkSTARKs provide a cryptographic OBSERVATION of a computation 🔍

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Apr 2024 12:28:36 +0000

🎯 At their core, zkSNARKs & zkSTARKs provide a cryptographic OBSERVATION of a computation 🔍

🕵️ The PROVER generates the PROOF
⚖️ The VERIFIER checks the PROOF
🔒 The PROOF itself encapsulates the computation, inputs & outputs

🤯 It's like a mathematical witness!

📖 Quoted from 2024-04-14 13:28
https://illya.sh/thoughts/ever-wondered-how-zksnarks-zkstarks-actually-work-under-the
Ever wondered how zkSNARKs & zkSTARKs ACTUALLY work under the hood? 🤔

🔐 These ZeroKnowledge protocols offer a novel way to PROVE computations without revealing the computation itself! 🤯

⛓️ Native match with blockchain

(a thread 🧵)

✅ Generating the proof = Executing the computation

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Apr 2024 12:28:37 +0000

✅ Generating the proof = Executing the computation
🔍 Verifying the proof = Checking the computation's correctness
⏰ Verification is ~CONSTANT time, regardless of computation complexity

🚀 How do you think this affects SCALABILITY? 💫

📖 Quoted from 2024-04-14 13:28
https://illya.sh/thoughts/at-their-core-zksnarks-zkstarks-provide-a-cryptographic
🎯 At their core, zkSNARKs & zkSTARKs provide a cryptographic OBSERVATION of a computation 🔍

🕵️ The PROVER generates the PROOF
⚖️ The VERIFIER checks the PROOF
🔒 The PROOF itself encapsulates the computation, inputs & outputs

🤯 It's like a mathematical witness!

🌿 Thanks to their RECURSIVE properties, zkSNARKs & zkSTARKs enable INFINITE SCALABILITY ♾️

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Apr 2024 12:28:37 +0000

🌿 Thanks to their RECURSIVE properties, zkSNARKs & zkSTARKs enable INFINITE SCALABILITY ♾️

🧩 You can COMPRESS 1000s of proofs into a SINGLE one
⏳ Verification time remains ~CONSTANT
💰 Gas costs are SLASHED

🔥 This is the power of ZKP! 🔥

📖 Quoted from 2024-04-14 13:28
https://illya.sh/thoughts/generating-the-proof-executing-the-computation
✅ Generating the proof = Executing the computation
🔍 Verifying the proof = Checking the computation's correctness
⏰ Verification is ~CONSTANT time, regardless of computation complexity

🚀 How do you think this affects SCALABILITY? 💫

🕰️ Compared to the Ethereum EVM's Linear Verifiable Computational Model (LVCM), zkSNARKs &…

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Apr 2024 12:28:38 +0000

🕰️ Compared to the Ethereum EVM's Linear Verifiable Computational Model (LVCM), zkSNARKs & zkSTARKs offer a Constant one (CVCM)

⚡ Verification time: O(1) vs. O(n)
🌪️ Scalability: ♾️ vs. 📈
⛓️ Interoperability: 🌉 vs. 🚧

🌟 The implications of ZK are PROFOUND!

📖 Quoted from 2024-04-14 13:28
https://illya.sh/thoughts/generating-the-proof-executing-the-computation
🌿 Thanks to their RECURSIVE properties, zkSNARKs & zkSTARKs enable INFINITE SCALABILITY ♾️

🧩 You can COMPRESS 1000s of proofs into a SINGLE one
⏳ Verification time remains ~CONSTANT
💰 Gas costs are SLASHED

🔥 This is the power of ZKP! 🔥

💡 When combined with the blockchain, zkSNARKs & zkSTARKs are disruptive:

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Apr 2024 12:28:39 +0000

💡 When combined with the blockchain, zkSNARKs & zkSTARKs are disruptive:

🌍 zkLocus: geolocation RWA
🏥 zkSafeZones: Safeguarding civilians in warzones. Proposing to UN and ICRC
⚖️ Automated legal compliance on-chain
🕵️ Privacy-preserving AI systems

🛠️

📖 Quoted from 2024-04-14 13:28
https://illya.sh/thoughts/compared-to-the-ethereum-evms-linear-verifiable
🕰️ Compared to the Ethereum EVM's Linear Verifiable Computational Model (LVCM), zkSNARKs & zkSTARKs offer a Constant one (CVCM)

⚡ Verification time: O(1) vs. O(n)
🌪️ Scalability: ♾️ vs. 📈
⛓️ Interoperability: 🌉 vs. 🚧

🌟 The implications of ZK are PROFOUND!

🔗 Deep dive into ZKP protocols of zkSNARK/zkSTARK and how combined with the blockchain they enable…

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Apr 2024 12:28:39 +0000

🔗 Deep dive into ZKP protocols of zkSNARK/zkSTARK and how combined with the blockchain they enable a new Verifiable Computation model by providing a cryptographic observation of a computation👇

https://illya.sh/blog/posts/zksnark-zkstark-verifiable-computation-model-blockchain/

📖 Quoted from 2024-04-14 13:28
https://illya.sh/thoughts/when-combined-with-the-blockchain-zksnarks-zkstarks-are
💡 When combined with the blockchain, zkSNARKs & zkSTARKs are disruptive:

🌍 zkLocus: geolocation RWA
🏥 zkSafeZones: Safeguarding civilians in warzones. Proposing to UN and ICRC
⚖️ Automated legal compliance on-chain
🕵️ Privacy-preserving AI systems

🛠️

🎲 Introducing RandoMina - a protocol for provable random number generation on the Mina Protocol…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 17:58:32 +0000

🎲 Introducing RandoMina - a protocol for provable random number generation on the Mina Protocol blockchain blockchain! 🔢🔐

🌟 Developed as part of zkLocus, RandoMina is now open-source and ready for you to explore! 🚀

🔗 GitHub: https://github.com/iluxonchik/randomina

🧵 Let's dive in! 👇

🔒 RandoMina leverages the power of Zero-Knowledge (ZK) proofs to ensure random numbers are:

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 17:58:32 +0000

🔒 RandoMina leverages the power of Zero-Knowledge (ZK) proofs to ensure random numbers are:

✅ Provable
✅ Secure
✅ Trustless

🌐 Built on Mina Protocol blockchain, RandoMina is tamper-proof and transparent! 🙌

📖 Quoted from 2024-04-15 18:58
https://illya.sh/thoughts/introducing-randomina-a-protocol-for-provable-random-number
🎲 Introducing RandoMina - a protocol for provable random number generation on the Mina Protocol blockchain blockchain! 🔢🔐

🌟 Developed as part of zkLocus, RandoMina is now open-source and ready for you to explore! 🚀

🔗 GitHub: https://github.com/iluxonchik/randomina

🧵 Let's dive in! 👇

⚡ Key Features:

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 17:58:33 +0000

⚡ Key Features:

🔀 Provable pseudo-randomness: VRF
🔒 Fresh & Tamper-proof: ZK and Mina Protocol blockchain
⚡ Efficient & scalable: zkSNARKs
🌐 Decentralized & trustless: $MINA
🔭 Transparent & auditable: OpenSource

📖 Quoted from 2024-04-15 18:58
https://illya.sh/thoughts/introducing-randomina-a-protocol-for-provable-random-number
🔒 RandoMina leverages the power of Zero-Knowledge (ZK) proofs to ensure random numbers are:

✅ Provable
✅ Secure
✅ Trustless

🌐 Built on Mina Protocol blockchain, RandoMina is tamper-proof and transparent! 🙌

💡 RandoMina is designed for dApps requiring secure randomness! 🎲

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 17:58:33 +0000

💡 RandoMina is designed for dApps requiring secure randomness! 🎲

🎰 Lotteries
🎲 Gaming
💰 DeFi
🔐 And more!

Native on Mina Protocol blockchain and bridgeable to other blockchains like Ethereum

📖 Quoted from 2024-04-15 18:58
https://illya.sh/thoughts/key-features
⚡ Key Features:

🔀 Provable pseudo-randomness: VRF
🔒 Fresh & Tamper-proof: ZK and Mina Protocol blockchain
⚡ Efficient & scalable: zkSNARKs
🌐 Decentralized & trustless: $MINA
🔭 Transparent & auditable: OpenSource

🧩 How does it work?

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 17:58:34 +0000

🧩 How does it work?

🌐 RandoMina cryptographically combines:

1️⃣ Network State
2️⃣ Sender-Specific Nonce
3️⃣ Local Seed/Nonce

🔢 This ensures fresh, unique & unpredictable random numbers for each user! 🎉

📖 Quoted from 2024-04-15 18:58
https://illya.sh/thoughts/key-features
💡 RandoMina is designed for dApps requiring secure randomness! 🎲

🎰 Lotteries
🎲 Gaming
💰 DeFi
🔐 And more!

Native on Mina Protocol blockchain and bridgeable to other blockchains like Ethereum

🎲 RandoMina is designed as a SmartContract in O1JS, making it easy to integrate with your zkApps &…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 17:58:35 +0000

🎲 RandoMina is designed as a SmartContract in O1JS, making it easy to integrate with your zkApps & dApps! 🛠️

🚀 Deploy it as a standalone contract or incorporate it into your custom solution 💫

🔗 https://github.com/iluxonchik/randomina

📖 Quoted from 2024-04-15 18:58
https://illya.sh/thoughts/how-does-it-work
🧩 How does it work?

🌐 RandoMina cryptographically combines:

1️⃣ Network State
2️⃣ Sender-Specific Nonce
3️⃣ Local Seed/Nonce

🔢 This ensures fresh, unique & unpredictable random numbers for each user! 🎉

👨‍💻 For developers eager to dive in, the https://github.com/iluxonchik/randomina on the GitHub…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 17:58:35 +0000

👨‍💻 For developers eager to dive in, the https://github.com/iluxonchik/randomina on the GitHub repo has all the juicy details! 📚

💻 Example usage
🛠️ Building instructions
🧪 Testing guide
📊 Coverage reports

🔗 Dive in here: https://github.com/iluxonchik/randomina

📖 Quoted from 2024-04-15 18:58
https://illya.sh/thoughts/randomina-is-designed-as-a-smartcontract-in-o1js-making-it
🎲 RandoMina is designed as a SmartContract in O1JS, making it easy to integrate with your zkApps & dApps! 🛠️

🚀 Deploy it as a standalone contract or incorporate it into your custom solution 💫

🔗 https://github.com/iluxonchik/randomina

🙌 RandoMina is an open-source effort to empower the $MINA community with secure, provable…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 17:58:36 +0000

🙌 RandoMina is an open-source effort to empower the $MINA community with secure, provable randomness! 💪

🤝 I welcome your feedback, contributions & ideas to iterate on this MVP! 🌟

🐦 Give zkLocus a shoutout - let's build together! 🚀

ZK ZKP Web3 Blockchain Mina

📖 Quoted from 2024-04-15 18:58
https://illya.sh/thoughts/randomina-is-designed-as-a-smartcontract-in-o1js-making-it
👨‍💻 For developers eager to dive in, the https://github.com/iluxonchik/randomina on the GitHub repo has all the juicy details! 📚

💻 Example usage
🛠️ Building instructions
🧪 Testing guide
📊 Coverage reports

🔗 Dive in here: https://github.com/iluxonchik/randomina

🧵 Let's dive into the technical details of RandoMina: a protocol for provable random number…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:22 +0000

🧵 Let's dive into the technical details of RandoMina: a protocol for provable random number generation on Mina Protocol blockchain blockchain written in 01JS! 🔢🔐

💡 Powering zkLocus

🔗 GitHub: https://github.com/iluxonchik/randomina/

1️⃣ RandoMina uses Zero-Knowledge proofs to ensure random numbers are provable, fresh, and…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:22 +0000

1️⃣ RandoMina uses Zero-Knowledge proofs to ensure random numbers are provable, fresh, and trustless. It combines:

- Network State 🌐
- Sender-Specific Nonce 🔒
- Local Seed/Nonce 🌱

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/lets-dive-into-the-technical-details-of-randomina-a-protocol
🧵 Let's dive into the technical details of RandoMina: a protocol for provable random number generation on Mina Protocol blockchain blockchain written in 01JS! 🔢🔐

💡 Powering zkLocus

🔗 GitHub: https://github.com/iluxonchik/randomina/

2️⃣ To ensure freshness, RandoMina leverages $Mina's VRF (Verifiable Random Function) values,…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:23 +0000

2️⃣ To ensure freshness, RandoMina leverages $Mina's VRF (Verifiable Random Function) values, specifically `stakingEpochData.seed.value`. 🔐

This value is updated with each new staking epoch, providing a unique seed for each epoch. 📅

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/lets-dive-into-the-technical-details-of-randomina-a-protocol
1️⃣ RandoMina uses Zero-Knowledge proofs to ensure random numbers are provable, fresh, and trustless. It combines:

- Network State 🌐
- Sender-Specific Nonce 🔒
- Local Seed/Nonce 🌱

3️⃣ Using `stakingEpochData.seed.value` as part of the PRNG seed ensures that random numbers are…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:23 +0000

3️⃣ Using `stakingEpochData.seed.value` as part of the PRNG seed ensures that random numbers are tied to the current epoch, preventing manipulation and guaranteeing freshness. 🌿

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/2-to-ensure-freshness-randomina-leverages-minas-vrf
2️⃣ To ensure freshness, RandoMina leverages $Mina's VRF (Verifiable Random Function) values, specifically `stakingEpochData.seed.value`. 🔐

This value is updated with each new staking epoch, providing a unique seed for each epoch. 📅

4️⃣ The Sender-Specific Nonce is derived from the sender's public key, ensuring unique…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:24 +0000

4️⃣ The Sender-Specific Nonce is derived from the sender's public key, ensuring unique (pseudo)random numbers across the network. 🌍

It's computed by Poseidon-hashing the public key, adding a global uniqueness component. 🔑

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/2-to-ensure-freshness-randomina-leverages-minas-vrf
3️⃣ Using `stakingEpochData.seed.value` as part of the PRNG seed ensures that random numbers are tied to the current epoch, preventing manipulation and guaranteeing freshness. 🌿

5️⃣ The Local Seed/Nonce allows generating multiple random numbers per epoch for each sender. 🎲

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:24 +0000

5️⃣ The Local Seed/Nonce allows generating multiple random numbers per epoch for each sender. 🎲

By varying this private nonce, an infinite number of pseudo-random numbers can be generated within a single epoch. ♾️

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/4-the-sender-specific-nonce-is-derived-from-the-senders
4️⃣ The Sender-Specific Nonce is derived from the sender's public key, ensuring unique (pseudo)random numbers across the network. 🌍

It's computed by Poseidon-hashing the public key, adding a global uniqueness component. 🔑

6️⃣ RandoMina's smart contract, `RandoMinaContract`, verifies the computation and ensures the…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:25 +0000

6️⃣ RandoMina's smart contract, `RandoMinaContract`, verifies the computation and ensures the claimed network state matches the current epoch. ✅

It's designed to be used or integrated by other contracts needing secure randomness. 🧩

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/4-the-sender-specific-nonce-is-derived-from-the-senders
5️⃣ The Local Seed/Nonce allows generating multiple random numbers per epoch for each sender. 🎲

By varying this private nonce, an infinite number of pseudo-random numbers can be generated within a single epoch. ♾️

7️⃣ Here's how RandoMina ensures unique random numbers! 🕵️

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:26 +0000

7️⃣ Here's how RandoMina ensures unique random numbers! 🕵️

- Two identities (public keys) will always generate different random numbers 🔑
- Same identity with different local seeds produces unique numbers 🌱
- Same identity across different epochs generates distinct numbers 📅

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/6-randominas-smart-contract-randominacontract-verifies-the
6️⃣ RandoMina's smart contract, `RandoMinaContract`, verifies the computation and ensures the claimed network state matches the current epoch. ✅

It's designed to be used or integrated by other contracts needing secure randomness. 🧩

8️⃣ When two identities generate random numbers using RandoMina:

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:26 +0000

8️⃣ When two identities generate random numbers using RandoMina:

✅ Sender-Specific Nonce is unique due to different public keys
✅ Combining unique Sender-Specific Nonce with Network State and Local Seed/Nonce
➡️ Always results in different random numbers for each identity! 🎉

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/7-heres-how-randomina-ensures-unique-random-numbers
7️⃣ Here's how RandoMina ensures unique random numbers! 🕵️

- Two identities (public keys) will always generate different random numbers 🔑
- Same identity with different local seeds produces unique numbers 🌱
- Same identity across different epochs generates distinct numbers 📅

9️⃣ For the same identity, using different Local Seed/Nonce values:

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:27 +0000

9️⃣ For the same identity, using different Local Seed/Nonce values:

🔄 Varying the Local Seed/Nonce
🔗 While keeping the Sender-Specific Nonce and Network State constant
➡️ Produces unique random numbers for the same identity within an epoch! 🪄

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/7-heres-how-randomina-ensures-unique-random-numbers
8️⃣ When two identities generate random numbers using RandoMina:

✅ Sender-Specific Nonce is unique due to different public keys
✅ Combining unique Sender-Specific Nonce with Network State and Local Seed/Nonce
➡️ Always results in different random numbers for each identity! 🎉

🔟 Across different epochs, the same identity generates distinct random numbers:

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:27 +0000

🔟 Across different epochs, the same identity generates distinct random numbers:

🌐 Network State changes with each new epoch
🆕 Updated Network State is combined with Sender-Specific Nonce and Local Seed/Nonce
➡️ Guarantees diff numbers for the same identity across epochs! ⏰

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/9-for-the-same-identity-using-different-local-seed-nonce
9️⃣ For the same identity, using different Local Seed/Nonce values:

🔄 Varying the Local Seed/Nonce
🔗 While keeping the Sender-Specific Nonce and Network State constant
➡️ Produces unique random numbers for the same identity within an epoch! 🪄

1️⃣1️⃣ Generating a random number involves:

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:28 +0000

1️⃣1️⃣ Generating a random number involves:

1. Preparing public (Network State, Sender) and private (Nonce) inputs
2. Generating a proof using `RandomNumberObservationCircuit`
3. Verifying the proof and network state with `RandoMinaContract`

Code & Tests: https://github.com/iluxonchik/randomina

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/9-for-the-same-identity-using-different-local-seed-nonce
🔟 Across different epochs, the same identity generates distinct random numbers:

🌐 Network State changes with each new epoch
🆕 Updated Network State is combined with Sender-Specific Nonce and Local Seed/Nonce
➡️ Guarantees diff numbers for the same identity across epochs! ⏰

1️⃣2️⃣ In summary, RandoMina leverages ZK proofs, $Mina's VRF `stakingEpochData.seed.value`, and a…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:28 +0000

1️⃣2️⃣ In summary, RandoMina leverages ZK proofs, $Mina's VRF `stakingEpochData.seed.value`, and a combination of network state, sender info, and local nonces to provide secure, verifiable, and infinite randomness for dAppss 🌟

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/11-generating-a-random-number-involves
1️⃣1️⃣ Generating a random number involves:

1. Preparing public (Network State, Sender) and private (Nonce) inputs
2. Generating a proof using `RandomNumberObservationCircuit`
3. Verifying the proof and network state with `RandoMinaContract`

Code & Tests: https://github.com/iluxonchik/randomina

That's it for technical deep dive into RandoMina and its 01JS implementation on Mina Protocol…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Apr 2024 19:24:29 +0000

That's it for technical deep dive into RandoMina and its 01JS implementation on Mina Protocol blockchain ! 🤿

For more details, check out the source code and tests on GitHub. ⭐️

Feel free to ask any questions or share your thoughts! 💬

🔗 https://github.com/iluxonchik/randomina

📖 Quoted from 2024-04-15 20:24
https://illya.sh/thoughts/11-generating-a-random-number-involves
1️⃣2️⃣ In summary, RandoMina leverages ZK proofs, $Mina's VRF `stakingEpochData.seed.value`, and a combination of network state, sender info, and local nonces to provide secure, verifiable, and infinite randomness for dAppss 🌟

Get ready for June 👀

hello@illya.sh (Illya Gerasymchuk) — Mon, 22 Apr 2024 11:13:46 +0000

Get ready for June 👀

🚀 BRICS Digital Currency: Cryptocurrency on a Public Blockchain 🪙

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Apr 2024 18:28:04 +0000

🚀 BRICS Digital Currency: Cryptocurrency on a Public Blockchain 🪙

In this article, we explore how the BRICS currency can be implemented on a public blockchain and challenge the claims made in "Digital Money Options for the BRICS" for Web3

🌍 The BRICS digital currency aims to integrate with existing monetary systems, creating a unified…

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Apr 2024 18:28:05 +0000

🌍 The BRICS digital currency aims to integrate with existing monetary systems, creating a unified economic area for member nations 🤝

Its value is algorithmically derived from various economic factors of the participating countries 📈

📖 Quoted from 2024-04-28 19:28
https://illya.sh/thoughts/brics-digital-currency-cryptocurrency-on-a-public-blockchain
🚀 BRICS Digital Currency: Cryptocurrency on a Public Blockchain 🪙

In this article, we explore how the BRICS currency can be implemented on a public blockchain and challenge the claims made in "Digital Money Options for the BRICS" for Web3

💡 While the original paper suggests the impossibility of realizing the BRICS currency as a…

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Apr 2024 18:28:05 +0000

💡 While the original paper suggests the impossibility of realizing the BRICS currency as a cryptocurrency, we'll challenge it 🤔

A public blockchain with SmartContracts, combined with Zero-Knowledge Proofs (ZKP), provides a natural fit for the implementation 🧩

📖 Quoted from 2024-04-28 19:28
https://illya.sh/thoughts/the-brics-digital-currency-aims-to-integrate-with-existing
🌍 The BRICS digital currency aims to integrate with existing monetary systems, creating a unified economic area for member nations 🤝

Its value is algorithmically derived from various economic factors of the participating countries 📈

🔍 Let's explore how the BRICS currency can leverage these technologies:

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Apr 2024 18:28:06 +0000

🔍 Let's explore how the BRICS currency can leverage these technologies:

✅ Dynamic supply mechanism via smart contracts
✅ Legal compliance on-chain using ZKPs
✅ Integration with DeFi and zkLocus for authenticated private geolocation

👉 A cryptocurrency for Web3

📖 Quoted from 2024-04-28 19:28
https://illya.sh/thoughts/the-brics-digital-currency-aims-to-integrate-with-existing
💡 While the original paper suggests the impossibility of realizing the BRICS currency as a cryptocurrency, we'll challenge it 🤔

A public blockchain with SmartContracts, combined with Zero-Knowledge Proofs (ZKP), provides a natural fit for the implementation 🧩

💸 The dynamic supply of the BRICS currency is defined by a formula:

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Apr 2024 18:28:06 +0000

💸 The dynamic supply of the BRICS currency is defined by a formula:

M = ForT + FDI + PI + ForEx + G&EX + InterSec + Der + ForDeposit + EuroCurrency + MTransfer + Etc.

This can be automated using smart contracts on the blockchain 🤖

Like Algorithmic stablecoins and Uniswap

📖 Quoted from 2024-04-28 19:28
https://illya.sh/thoughts/lets-explore-how-the-brics-currency-can-leverage-these
🔍 Let's explore how the BRICS currency can leverage these technologies:

✅ Dynamic supply mechanism via smart contracts
✅ Legal compliance on-chain using ZKPs
✅ Integration with DeFi and zkLocus for authenticated private geolocation

👉 A cryptocurrency for Web3

🌍 Integrating zkLocus allows associating geolocation data with each BRICS transaction while…

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Apr 2024 18:28:07 +0000

🌍 Integrating zkLocus allows associating geolocation data with each BRICS transaction while preserving user privacy 🔒

zkLocus turns geolocation into a programmable real-world asset (RWA), enabling location-based fees and taxation📍

✨ Native on MinaProtocol

🧩 Implementing the BRICS currency on a public blockchain reduces cost & complexity

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Apr 2024 18:28:10 +0000

🧩 Implementing the BRICS currency on a public blockchain reduces cost & complexity

The dynamic supply is controlled by smart contracts, while ZKPs bridge data from arbitrary sources 🌉

Demand is driven by incentives for participating in the BRICS economic network 💰

📖 Quoted from 2024-04-28 19:28
https://illya.sh/thoughts/integrating-zklocus-allows-associating-geolocation-data-with
🌍 Integrating zkLocus allows associating geolocation data with each BRICS transaction while preserving user privacy 🔒

zkLocus turns geolocation into a programmable real-world asset (RWA), enabling location-based fees and taxation📍

✨ Native on MinaProtocol

🌟 By embracing public blockchains and ZeroKnowledge technologies, the BRICS digital currency can…

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Apr 2024 18:28:12 +0000

🌟 By embracing public blockchains and ZeroKnowledge technologies, the BRICS digital currency can pioneer a new era of finance🔮

A more efficient, interoperable, decentralized, and inclusive financial system aligned with Web3 principles 🌍

📖 Quoted from 2024-04-28 19:28
https://illya.sh/thoughts/implementing-the-brics-currency-on-a-public-blockchain
🧩 Implementing the BRICS currency on a public blockchain reduces cost & complexity

The dynamic supply is controlled by smart contracts, while ZKPs bridge data from arbitrary sources 🌉

Demand is driven by incentives for participating in the BRICS economic network 💰

Read the full article to dive deeper into how the BRICS digital currency can be realized as a…

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Apr 2024 18:28:13 +0000

Read the full article to dive deeper into how the BRICS digital currency can be realized as a cryptocurrency on a public blockchain. 📖

🔗 https://illya.sh/blog/posts/brics-cryptocurrency-blockchain/

Let's discuss! Share your thoughts below🗣️

📖 Quoted from 2024-04-28 19:28
https://illya.sh/thoughts/by-embracing-public-blockchains-and-zeroknowledge
🌟 By embracing public blockchains and ZeroKnowledge technologies, the BRICS digital currency can pioneer a new era of finance🔮

A more efficient, interoperable, decentralized, and inclusive financial system aligned with Web3 principles 🌍

Additional insights from a practical perspective can be found here 👇

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Apr 2024 21:44:47 +0000

Additional insights from a practical perspective can be found here 👇

🔗

Mina's Got Recursion

hello@illya.sh (Illya Gerasymchuk) — Tue, 14 May 2024 14:36:34 +0000

Mina's Got Recursion

I invite you to check your country's net exports as a % of GDP and be surprised 😳

hello@illya.sh (Illya Gerasymchuk) — Mon, 20 May 2024 13:37:18 +0000

I invite you to check your country's net exports as a % of GDP and be surprised 😳

GDP comprises of numerous measures, some of which don't have any relation to the produced value

Net exports provide a more objective measure of self-sustainability and relative value

🔴 GDP is a useless metric 🔴

hello@illya.sh (Illya Gerasymchuk) — Mon, 20 May 2024 14:03:27 +0000

🔴 GDP is a useless metric 🔴

A country may resort to debt, inject that debt into the economy, and see nominal GDP figures raise, without producing value. This is a recipe for an economic bubble

Debt-to-GDP ratio presents a much clearer picture (smaller is better)👇

GPT-4 outperforms both, carbon-based financial analysts (humans) and purpose-specific ANNs

hello@illya.sh (Illya Gerasymchuk) — Thu, 23 May 2024 09:25:36 +0000

GPT-4 outperforms both, carbon-based financial analysts (humans) and purpose-specific ANNs

While the former is understandable, the latter is surprising. The broader context of an LLM appears to be more important than the specialized multi-dimensionality of an ANN

Advanced prompt injection technique for GitHub Copilot GPT-4 😆

hello@illya.sh (Illya Gerasymchuk) — Fri, 24 May 2024 10:24:22 +0000

Advanced prompt injection technique for GitHub Copilot GPT-4 😆

🚨 PRIVACY IS A MYTH! 🕵️‍♂️

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:49 +0000

🚨 PRIVACY IS A MYTH! 🕵️‍♂️

Digital privacy is fundamentally unfeasible, unless we rely on verifiable computation constructs like Zero-Knowledge Proofs (ZKP) 🔐

A thread 🧵 on why ZKPs are the key to true digital privacy 👇

https://illya.sh/blog/posts/privacy-is-a-myth-without-zero-knowledge-proofs/

Privacy ZeroKnowledge Web3

💡 The problem with digital privacy lies not in how data is stored & shared, but what data is…

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:50 +0000

💡 The problem with digital privacy lies not in how data is stored & shared, but what data is shared 🤔

Even with encryption, once sensitive data leaves your device, it's compromised 😱

But what if we could share data in an inherently private manner? 🤯

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/privacy-is-a-myth
🚨 PRIVACY IS A MYTH! 🕵️‍♂️

Digital privacy is fundamentally unfeasible, unless we rely on verifiable computation constructs like Zero-Knowledge Proofs (ZKP) 🔐

A thread 🧵 on why ZKPs are the key to true digital privacy 👇

https://illya.sh/blog/posts/privacy-is-a-myth-without-zero-knowledge-proofs/

Privacy ZeroKnowledge Web3

💡 Zero-Knowledge Proofs fix digital privacy 🌅

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:52 +0000

💡 Zero-Knowledge Proofs fix digital privacy 🌅

Instead of protecting sensitive data after sharing, ZKPs enable sharing data in an inherently private manner 🔐

By turning data into computation, ZKPs abstract it to preserve privacy 🧩

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/the-problem-with-digital-privacy-lies-not-in-how-data-is
💡 The problem with digital privacy lies not in how data is stored & shared, but what data is shared 🤔

Even with encryption, once sensitive data leaves your device, it's compromised 😱

But what if we could share data in an inherently private manner? 🤯

🔍 Solutions like zkLocus, zkSafeZones, zkML, and zkVM leverage ZKPs for privacy🛡️

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:53 +0000

🔍 Solutions like zkLocus, zkSafeZones, zkML, and zkVM leverage ZKPs for privacy🛡️

- zkLocus: Private geolocation sharing on Mina Protocol blockchain 📍
- zkSafeZones: Civilian protection in warzones 🏥
- zkML: Private machine learning 🤖
- zkVM: Verifiable computation 💻

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/zero-knowledge-proofs-fix-digital-privacy
💡 Zero-Knowledge Proofs fix digital privacy 🌅

Instead of protecting sensitive data after sharing, ZKPs enable sharing data in an inherently private manner 🔐

By turning data into computation, ZKPs abstract it to preserve privacy 🧩

🔐 How does Mina Protocol blockchain fit into this? 🤔

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:53 +0000

🔐 How does Mina Protocol blockchain fit into this? 🤔

$MINA serves as the foundation for ZKP apps, thanks to its programmable zkApps 🚀

It uses recursive zkSNARKs to create proofs of arbitrary computations, thus serving as the foundation of privacy solutions 💪

It's proof of everything

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/solutions-like-zklocus-zksafezones-zkml-and-zkvm-leverage
🔍 Solutions like zkLocus, zkSafeZones, zkML, and zkVM leverage ZKPs for privacy🛡️

- zkLocus: Private geolocation sharing on Mina Protocol blockchain 📍
- zkSafeZones: Civilian protection in warzones 🏥
- zkML: Private machine learning 🤖
- zkVM: Verifiable computation 💻

🌿 Merkle Trees, MPC, and homomorphic encryption complement ZKPs. 🍃

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:54 +0000

🌿 Merkle Trees, MPC, and homomorphic encryption complement ZKPs. 🍃

- Merkle Trees: Efficient & private data storage 📚
- MPC: Secure multi-party computation 🤝
- Homomorphic Encryption: Computation on encrypted data 🔒

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/solutions-like-zklocus-zksafezones-zkml-and-zkvm-leverage
🔐 How does Mina Protocol blockchain fit into this? 🤔

$MINA serves as the foundation for ZKP apps, thanks to its programmable zkApps 🚀

It uses recursive zkSNARKs to create proofs of arbitrary computations, thus serving as the foundation of privacy solutions 💪

It's proof of everything

🔐 ZKPs remove the need to trust third parties for privacy. 🙅‍♂️

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:55 +0000

🔐 ZKPs remove the need to trust third parties for privacy. 🙅‍♂️

Instead, we rely on mathematical guarantees 🧮

This allows us to retain full custody & control over our data while enjoying digital services 😌

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/merkle-trees-mpc-and-homomorphic-encryption-complement-zkps
🌿 Merkle Trees, MPC, and homomorphic encryption complement ZKPs. 🍃

- Merkle Trees: Efficient & private data storage 📚
- MPC: Secure multi-party computation 🤝
- Homomorphic Encryption: Computation on encrypted data 🔒

🌍 With ZKPs, we can build privacy-preserving: 🏗️

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:56 +0000

🌍 With ZKPs, we can build privacy-preserving: 🏗️

- Search engines 🔍
- Social networks 👥
- E-commerce platforms 🛒
- Even 24/7 global video surveillance! 📹

All without compromising functionality, business or individual privacy 💪

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/zkps-remove-the-need-to-trust-third-parties-for-privacy
🔐 ZKPs remove the need to trust third parties for privacy. 🙅‍♂️

Instead, we rely on mathematical guarantees 🧮

This allows us to retain full custody & control over our data while enjoying digital services 😌

🔍 Imagine a search engine that never sees your raw queries, or a social network that keeps your…

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:57 +0000

🔍 Imagine a search engine that never sees your raw queries, or a social network that keeps your connections hidden 😲

With ZKP, it's not just possible, but practical! 🎉

zkLocus, powered by Mina Protocol blockchain, is turning private geolocation into reality 📍

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/with-zkps-we-can-build-privacy-preserving
🌍 With ZKPs, we can build privacy-preserving: 🏗️

- Search engines 🔍
- Social networks 👥
- E-commerce platforms 🛒
- Even 24/7 global video surveillance! 📹

All without compromising functionality, business or individual privacy 💪

📹 Even 24/7 global video surveillance can be privacy-preserving with ZKP! 🌍

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:58 +0000

📹 Even 24/7 global video surveillance can be privacy-preserving with ZKP! 🌍

By combining zkML and verifiable computation, cameras can detect suspicious activity without storing private data 🕵️‍♀️

No, it's not magic. It's mathematics 🔐

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/imagine-a-search-engine-that-never-sees-your-raw-queries-or
🔍 Imagine a search engine that never sees your raw queries, or a social network that keeps your connections hidden 😲

With ZKP, it's not just possible, but practical! 🎉

zkLocus, powered by Mina Protocol blockchain, is turning private geolocation into reality 📍

🗣️ Privacy is a fundamental human right, and digital privacy is not an exception 📜

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:01:59 +0000

🗣️ Privacy is a fundamental human right, and digital privacy is not an exception 📜

With Mina Protocol blockchain and ZKP solutions like zkLocus, we can build a future where privacy is the default 🙌

As the Web3 community, this is our mission & responsibility 💪

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/even-24-7-global-video-surveillance-can-be-privacy
📹 Even 24/7 global video surveillance can be privacy-preserving with ZKP! 🌍

By combining zkML and verifiable computation, cameras can detect suspicious activity without storing private data 🕵️‍♀️

No, it's not magic. It's mathematics 🔐

👉 Learn more about ZKPs & privacy:

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 May 2024 12:02:00 +0000

👉 Learn more about ZKPs & privacy:

- zkLocus: https://zklocus.dev/
- zkSafeZones: https://zklocus.dev/zkSafeZones/
- Full article: https://illya.sh/blog/posts/privacy-is-a-myth-without-zero-knowledge-proofs/

Let's make privacy the default, not an afterthought 🌟

📖 Quoted from 2024-05-26 13:01
https://illya.sh/thoughts/privacy-is-a-fundamental-human-right-and-digital-privacy-is
🗣️ Privacy is a fundamental human right, and digital privacy is not an exception 📜

With Mina Protocol blockchain and ZKP solutions like zkLocus, we can build a future where privacy is the default 🙌

As the Web3 community, this is our mission & responsibility 💪

Linguistic vocal communication is such a wild concept 🤯

hello@illya.sh (Illya Gerasymchuk) — Mon, 27 May 2024 13:13:57 +0000

Linguistic vocal communication is such a wild concept 🤯

Like, I can take an abstract concept that I have in my mind, transform it into vibrations, transmit it wirelessly over air and have another individual parse it back into a similar abstract concept, now in their mind

🌍 Imagine 24/7 global video surveillance that doesn't compromise privacy

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:11 +0000

🌍 Imagine 24/7 global video surveillance that doesn't compromise privacy

🤯 Sounds impossible?

😎 Zero-Knowledge Proofs disagree

Here's why 🧵👇

📹 Imagine a global network of video cameras, monitoring every corner, every alley, even inside…

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:12 +0000

📹 Imagine a global network of video cameras, monitoring every corner, every alley, even inside your home 🏠

Sounds like a privacy nightmare, right? 😨

Not necessarily! 😮

With ZKP, we can mathematically guarantee that private data is never stored or shared! 🔐

📖 Quoted from 2024-05-30 18:57
https://illya.sh/thoughts/imagine-24-7-global-video-surveillance-that-doesnt
🌍 Imagine 24/7 global video surveillance that doesn't compromise privacy

🤯 Sounds impossible?

😎 Zero-Knowledge Proofs disagree

Here's why 🧵👇

🔍 The key lies in the verifiable computation model of Zero-Knowledge Proofs 🔑

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:12 +0000

🔍 The key lies in the verifiable computation model of Zero-Knowledge Proofs 🔑

Instead of trusting third-parties not to misuse data, we rely on cryptographic proofs to ensure privacy 💪

It's not about faith, but rather mathematical certainty 🧮

🔗 https://illya.sh/blog/posts/zksnark-zkstark-verifiable-computation-model-blockchain/

📖 Quoted from 2024-05-30 18:57
https://illya.sh/thoughts/imagine-a-global-network-of-video-cameras-monitoring-every
📹 Imagine a global network of video cameras, monitoring every corner, every alley, even inside your home 🏠

Sounds like a privacy nightmare, right? 😨

Not necessarily! 😮

With ZKP, we can mathematically guarantee that private data is never stored or shared! 🔐

🧩 Here's how a ZKP-powered surveillance system works:

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:13 +0000

🧩 Here's how a ZKP-powered surveillance system works:

1️⃣ Cameras feed live video into a zkML model
2️⃣ The model labels data as "suspicious" or "non-suspicious"
3️⃣ Only "suspicious" footage is stored & reported
4️⃣ The zkML model is public, ensuring transparency

📖 Quoted from 2024-05-30 18:57
https://illya.sh/thoughts/imagine-a-global-network-of-video-cameras-monitoring-every
🔍 The key lies in the verifiable computation model of Zero-Knowledge Proofs 🔑

Instead of trusting third-parties not to misuse data, we rely on cryptographic proofs to ensure privacy 💪

It's not about faith, but rather mathematical certainty 🧮

🔗 https://illya.sh/blog/posts/zksnark-zkstark-verifiable-computation-model-blockchain/

🔐 zkSNARKs/zkSTARKs can be used to create ZK proofs that attest to the correct execution of the…

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:14 +0000

🔐 zkSNARKs/zkSTARKs can be used to create ZK proofs that attest to the correct execution of the camera's code 📸

👮‍♀️ These proofs, representing an observation of a computation, ensure that non-suspicious video is discarded, thus preserving privacy

👉 Do not trust, verify 👈

📖 Quoted from 2024-05-30 18:57
https://illya.sh/thoughts/heres-how-a-zkp-powered-surveillance-system-works
🧩 Here's how a ZKP-powered surveillance system works:

1️⃣ Cameras feed live video into a zkML model
2️⃣ The model labels data as "suspicious" or "non-suspicious"
3️⃣ Only "suspicious" footage is stored & reported
4️⃣ The zkML model is public, ensuring transparency

🟣 Mina Protocol can implement the foundational layer 🚀

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:15 +0000

🟣 Mina Protocol can implement the foundational layer 🚀

Verification keys that attest to the correct execution of the camera's code can be stored on $MINA 🔑

In practice, this involves commitments and ZKP circuits to the zkML model, thus ensuring the right one is used 🧠

📖 Quoted from 2024-05-30 18:57
https://illya.sh/thoughts/zksnarks-zkstarks-can-be-used-to-create-zk-proofs-that
🔐 zkSNARKs/zkSTARKs can be used to create ZK proofs that attest to the correct execution of the camera's code 📸

👮‍♀️ These proofs, representing an observation of a computation, ensure that non-suspicious video is discarded, thus preserving privacy

👉 Do not trust, verify 👈

📋 Here's how Mina Protocol blockchain fits into the picture:

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:16 +0000

📋 Here's how Mina Protocol blockchain fits into the picture:

1️⃣ zkSNARK circuits verifying camera code execution are stored on Mina
2️⃣ Commitments & ZKP circuits to the zkML model are also stored on the blockchain
3️⃣ All proofs from cameras are submitted & verified against them

📖 Quoted from 2024-05-30 18:57
https://illya.sh/thoughts/mina-protocol-can-implement-the-foundational-layer
🟣 Mina Protocol can implement the foundational layer 🚀

Verification keys that attest to the correct execution of the camera's code can be stored on $MINA 🔑

In practice, this involves commitments and ZKP circuits to the zkML model, thus ensuring the right one is used 🧠

🚨 By using Mina Protocol as a public layer for computation proofs, we create an auditable &…

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:16 +0000

🚨 By using Mina Protocol as a public layer for computation proofs, we create an auditable & transparent system 🕵️‍♀️

Anyone can verify that the cameras are operating as promised, without misusing the video data 🔍

📖 Quoted from 2024-05-30 18:57
https://illya.sh/thoughts/heres-how-mina-protocol-blockchain-fits-into-the-picture
📋 Here's how Mina Protocol blockchain fits into the picture:

1️⃣ zkSNARK circuits verifying camera code execution are stored on Mina
2️⃣ Commitments & ZKP circuits to the zkML model are also stored on the blockchain
3️⃣ All proofs from cameras are submitted & verified against them

🪄 This is just one example of what is possible with ZeroKnowledge Proofs

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:17 +0000

🪄 This is just one example of what is possible with ZeroKnowledge Proofs

📚 It was taken from my article "Privacy Is A Myth. Unless You're Using Zero-Knowledge Proofs" 👇

https://illya.sh/blog/posts/privacy-is-a-myth-without-zero-knowledge-proofs/

📖 Quoted from 2024-05-30 18:57
https://illya.sh/thoughts/heres-how-mina-protocol-blockchain-fits-into-the-picture
🚨 By using Mina Protocol as a public layer for computation proofs, we create an auditable & transparent system 🕵️‍♀️

Anyone can verify that the cameras are operating as promised, without misusing the video data 🔍

😳 ZKP will redefine what you know about computation and privacy

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 May 2024 17:57:17 +0000

😳 ZKP will redefine what you know about computation and privacy

📍 This is what we are doing at zkLocus, by turning geolocation into a RWA

🔗 To learn more, visit https://zklocus.dev/

📖 Quoted from 2024-05-30 18:57
https://illya.sh/thoughts/this-is-just-one-example-of-what-is-possible-with
🪄 This is just one example of what is possible with ZeroKnowledge Proofs

📚 It was taken from my article "Privacy Is A Myth. Unless You're Using Zero-Knowledge Proofs" 👇

https://illya.sh/blog/posts/privacy-is-a-myth-without-zero-knowledge-proofs/

🛒 E-commerce & Privacy - Myth or Reality? 🔐

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:26:59 +0000

🛒 E-commerce & Privacy - Myth or Reality? 🔐

💻 Online shopping without revealing your personal data?

🚀 Zero-Knowledge Proofs (ZKP), zkLocus and Mina Protocol blockchain enable just that

https://illya.sh/blog/posts/privacy-is-a-myth-without-zero-knowledge-proofs/

Here's how 🧵👇

🔍 The challenge with e-commerce privacy lies in two main areas:

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:00 +0000

🔍 The challenge with e-commerce privacy lies in two main areas:

1️⃣ Keeping search queries private 🔒
2️⃣ Protecting personal info like name and address 🙅‍♂️

Traditional platforms require us to trust them with this data

📖 Quoted from 2024-06-01 11:26
https://illya.sh/thoughts/e-commerce-privacy-myth-or-reality
🛒 E-commerce & Privacy - Myth or Reality? 🔐

💻 Online shopping without revealing your personal data?

🚀 Zero-Knowledge Proofs (ZKP), zkLocus and Mina Protocol blockchain enable just that

https://illya.sh/blog/posts/privacy-is-a-myth-without-zero-knowledge-proofs/

Here's how 🧵👇

💰 Wether you are online shopping on Amazon, eBay, AliExpress or any other e-commerce platform, you…

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:00 +0000

💰 Wether you are online shopping on Amazon, eBay, AliExpress or any other e-commerce platform, you are sharing your personal data with them.

🤔 But does it have to be this way?

✨ Is a fully private online shopping experience possible?

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/the-challenge-with-e-commerce-privacy-lies-in-two-main-areas
🔍 The challenge with e-commerce privacy lies in two main areas:

1️⃣ Keeping search queries private 🔒
2️⃣ Protecting personal info like name and address 🙅‍♂️

Traditional platforms require us to trust them with this data

❗️Yes, and Zero-Knowledge Proofs are the answer❗️

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:02 +0000

❗️Yes, and Zero-Knowledge Proofs are the answer❗️

📜 Instead of sharing raw data, ZKP allow us to share proofs about our data

🤯 Now, you can search for products to buy without revealing your exact queries!

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/the-challenge-with-e-commerce-privacy-lies-in-two-main-areas
💰 Wether you are online shopping on Amazon, eBay, AliExpress or any other e-commerce platform, you are sharing your personal data with them.

🤔 But does it have to be this way?

✨ Is a fully private online shopping experience possible?

🧩 Here's how private search queries work:

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:02 +0000

🧩 Here's how private search queries work:

1️⃣ User runs a zkML computation to abstract their query
2️⃣ The abstracted query is sent to the e-commerce platform
3️⃣ Platform returns relevant results, which are filtered locally by the user

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/yes-and-zero-knowledge-proofs-are-the-answer
❗️Yes, and Zero-Knowledge Proofs are the answer❗️

📜 Instead of sharing raw data, ZKP allow us to share proofs about our data

🤯 Now, you can search for products to buy without revealing your exact queries!

🕵️‍♀️ Such an approach allows us to search for data with a centralized provider without revealing…

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:03 +0000

🕵️‍♀️ Such an approach allows us to search for data with a centralized provider without revealing our exact search queries

🔎 In the end, the provider has enough information to provide us with relevant results, without being able to track us

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/yes-and-zero-knowledge-proofs-are-the-answer
🧩 Here's how private search queries work:

1️⃣ User runs a zkML computation to abstract their query
2️⃣ The abstracted query is sent to the e-commerce platform
3️⃣ Platform returns relevant results, which are filtered locally by the user

👀 Private search quries are great, but can we go a step further?

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:04 +0000

👀 Private search quries are great, but can we go a step further?

🪪 Is it possible to shop online without revealing any of your identity and shipping data to the e-commerce platform?

🤯 The answer is YES!

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/such-an-approach-allows-us-to-search-for-data-with-a
🕵️‍♀️ Such an approach allows us to search for data with a centralized provider without revealing our exact search queries

🔎 In the end, the provider has enough information to provide us with relevant results, without being able to track us

🔐 How can we conceal personal info like name and address?

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:04 +0000

🔐 How can we conceal personal info like name and address?

📍This is where zkLocus comes in!

🌍 zkLocus allows users to prove they're in a certain area without revealing exact coordinates

🏠 It's like saying "I'm somewhere in New York" without revealing your exact address

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/private-search-quries-are-great-but-can-we-go-a-step-further
👀 Private search quries are great, but can we go a step further?

🪪 Is it possible to shop online without revealing any of your identity and shipping data to the e-commerce platform?

🤯 The answer is YES!

🎁 Here's how zkLocus enables private shipping:

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:05 +0000

🎁 Here's how zkLocus enables private shipping:

1️⃣ You creates a zkLocus proof of their location
2️⃣ Proof is associated with encrypted name & address
3️⃣ E-commerce platform gets general area, but not exact info
4️⃣ Package is sent to a processing center in the general area
5️⃣👇

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/private-search-quries-are-great-but-can-we-go-a-step-further
🔐 How can we conceal personal info like name and address?

📍This is where zkLocus comes in!

🌍 zkLocus allows users to prove they're in a certain area without revealing exact coordinates

🏠 It's like saying "I'm somewhere in New York" without revealing your exact address

5️⃣ You provide the decryption key to the center to reveal address

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:05 +0000

5️⃣ You provide the decryption key to the center to reveal address

📦 The package then gets shipped & delivered to the user

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/heres-how-zklocus-enables-private-shipping
🎁 Here's how zkLocus enables private shipping:

1️⃣ You creates a zkLocus proof of their location
2️⃣ Proof is associated with encrypted name & address
3️⃣ E-commerce platform gets general area, but not exact info
4️⃣ Package is sent to a processing center in the general area
5️⃣👇

🔐 Throughout this process, your name and address remain hidden from the e-commerce platform. 😌

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:06 +0000

🔐 Throughout this process, your name and address remain hidden from the e-commerce platform. 😌

🌍 The platform only knows a broad area, not your specific location

🪪 The processing center only gets your exact info when you choose to reveal it

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/heres-how-zklocus-enables-private-shipping
5️⃣ You provide the decryption key to the center to reveal address

📦 The package then gets shipped & delivered to the user

🟣 This entire solution can be implemented on Mina Protocol blockchain! 💪

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:06 +0000

🟣 This entire solution can be implemented on Mina Protocol blockchain! 💪

💻 $MINA's zkApps enable efficient, scalable and verifiable computation powered by zkSNARKs

📍 Combined with zkLocus for geolocation proofs, we have all of the necessary components

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/throughout-this-process-your-name-and-address-remain-hidden
🔐 Throughout this process, your name and address remain hidden from the e-commerce platform. 😌

🌍 The platform only knows a broad area, not your specific location

🪪 The processing center only gets your exact info when you choose to reveal it

🔗 The process leverages several ZKP building blocks:

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:07 +0000

🔗 The process leverages several ZKP building blocks:

⚙️ zkSNARKs for succinct, verifiable proofs
🌿 Merkle Trees for efficient data storage
🔐 Cyrptographic Commitments for data integrity

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/throughout-this-process-your-name-and-address-remain-hidden
🟣 This entire solution can be implemented on Mina Protocol blockchain! 💪

💻 $MINA's zkApps enable efficient, scalable and verifiable computation powered by zkSNARKs

📍 Combined with zkLocus for geolocation proofs, we have all of the necessary components

🛡️ The result is an e-commerce platform that respects end-user privacy without sacrificing…

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:08 +0000

🛡️ The result is an e-commerce platform that respects end-user privacy without sacrificing functionality 🎉

❌ There is no need to trade personal data for convenience

🙌 ZKP, Mina Protocol blockchain and zkLocus enable us to have both!

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/the-process-leverages-several-zkp-building-blocks
🔗 The process leverages several ZKP building blocks:

⚙️ zkSNARKs for succinct, verifiable proofs
🌿 Merkle Trees for efficient data storage
🔐 Cyrptographic Commitments for data integrity

👉 Learn more about Zero-Knowledge Proofs, their applications, and how they redefine privacy:

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Jun 2024 10:27:09 +0000

👉 Learn more about Zero-Knowledge Proofs, their applications, and how they redefine privacy:

📍 zkLocus: https://zklocus.dev/

📖 Full article: https://illya.sh/blog/posts/privacy-is-a-myth-without-zero-knowledge-proofs/

💜 Let's build a Web3 future where privacy is the default, not an afterthought

📖 Quoted from 2024-06-01 11:27
https://illya.sh/thoughts/the-result-is-an-e-commerce-platform-that-respects-end-user
🛡️ The result is an e-commerce platform that respects end-user privacy without sacrificing functionality 🎉

❌ There is no need to trade personal data for convenience

🙌 ZKP, Mina Protocol blockchain and zkLocus enable us to have both!

Treasury rates (Treasury Bills & Bonds) are risk-free, but they do not represent the risk-free…

hello@illya.sh (Illya Gerasymchuk) — Sun, 02 Jun 2024 15:19:52 +0000

Treasury rates (Treasury Bills & Bonds) are risk-free, but they do not represent the risk-free rate, as they have artificial incentives. The risk-free rate must represent the true cost of borrowing money. Overnight exchange rates are a much better measure of the risk-free rate. http

🔴 Every time the Treasury Bond rate (#DGS10 / #US10Y) raises above the Fed Funds Rate (#FEDFUNDS /…

hello@illya.sh (Illya Gerasymchuk) — Sun, 02 Jun 2024 22:03:20 +0000

🔴 Every time the Treasury Bond rate (#DGS10 / #US10Y) raises above the Fed Funds Rate (#FEDFUNDS / #EFFR), the Fed Funds Rate decreases dramatically

Historically, this has always been the case
and this is exactly what's happening now

Expect a rate cut from the #FED very soon

Besides inflation there is also discounting, which measures the time value of money

hello@illya.sh (Illya Gerasymchuk) — Mon, 03 Jun 2024 19:59:13 +0000

Besides inflation there is also discounting, which measures the time value of money

Discounting states that money today is worth more than tomorrow, since it can be invested to earn an interest

You can compute today's value of future money using the formula below 👇

Reaaaaady. Let's go hardfork

hello@illya.sh (Illya Gerasymchuk) — Tue, 04 Jun 2024 11:48:19 +0000

Reaaaaady. Let's go hardfork

And the first rate cut comes from the European Central Bank (#ECB)

hello@illya.sh (Illya Gerasymchuk) — Fri, 07 Jun 2024 09:18:01 +0000

And the first rate cut comes from the European Central Bank (#ECB)

Federal Reserve (#FED) coming up next

A few days ago I tweeted about how a rate cut is imminent, as suggested by the Treasury Bond rates falling below the overnight exchange rate👇

Forward rates compute the borrowing cost of money for a future period. They're derived from the…

hello@illya.sh (Illya Gerasymchuk) — Mon, 10 Jun 2024 11:08:48 +0000

Forward rates compute the borrowing cost of money for a future period. They're derived from the existing interest rates in the market. Useful to compare investments, arbitrage on lend/borrow positions and even predict future inflation value

Here's the concept visualized 👇

📚 Learning how derivatives are priced will make you realize that all the models are based on…

hello@illya.sh (Illya Gerasymchuk) — Wed, 12 Jun 2024 17:16:38 +0000

📚 Learning how derivatives are priced will make you realize that all the models are based on financing with an interest rate (IR). Future value of a derivative is discounted with an IR.

Where does this extra money come from?

🔎 Hint:
you may see it manifest as #inflation 😉

If you think you understand futures contracts, you must learn bond futures

hello@illya.sh (Illya Gerasymchuk) — Sun, 23 Jun 2024 15:28:58 +0000

If you think you understand futures contracts, you must learn bond futures

Besides some differences, like dynamic settlement price, you will quickly realize how much #DeFi improves over #TradFi

The future of finance is on-chain

Simplicity, transparency & efficiency http

🚀 Exploring Tokenized Liquid Futures Contracts

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:26 +0000

🚀 Exploring Tokenized Liquid Futures Contracts

A deep dive into how they can be implemented on Mina Protocol blockchain without oracles or trusted intermediaries

Covering technical aspects, use cases, and innovations of this DeFi derivative over TradFi solutions

Futures contracts serve crucial roles in finance:

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:27 +0000

Futures contracts serve crucial roles in finance:

1️⃣ Hedging against price volatility
2️⃣ Speculation on future asset prices
3️⃣ Price discovery for underlying assets

Smart contracts on the blockchain will disrupt this $1T+ market. Here's how ⬇️

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/exploring-tokenized-liquid-futures-contracts
🚀 Exploring Tokenized Liquid Futures Contracts

A deep dive into how they can be implemented on Mina Protocol blockchain without oracles or trusted intermediaries

Covering technical aspects, use cases, and innovations of this DeFi derivative over TradFi solutions

🏦 Traditional futures require centralized clearing houses

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:28 +0000

🏦 Traditional futures require centralized clearing houses

On the blockchain, smart contracts eliminate intermediaries, enabling decentralized peer-to-peer agreements

Example: A contract to trade 1000 $MINA for 2000 $USDC in 1 year, regardless of future $MINA price 📊

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/futures-contracts-serve-crucial-roles-in-finance
Futures contracts serve crucial roles in finance:

1️⃣ Hedging against price volatility
2️⃣ Speculation on future asset prices
3️⃣ Price discovery for underlying assets

Smart contracts on the blockchain will disrupt this $1T+ market. Here's how ⬇️

Futures pricing is deterministic, and its main goal is to prevent arbitrage:

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:28 +0000

Futures pricing is deterministic, and its main goal is to prevent arbitrage:

💰 Futures Price = Spot Price * e^(rT)
- r: risk-free rate (e.g., $MINA staking yield)
- T: time to maturity

This formula approximates pricing at maturity in both TradFi and DeFi 🧮

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/traditional-futures-require-centralized-clearing-houses
🏦 Traditional futures require centralized clearing houses

On the blockchain, smart contracts eliminate intermediaries, enabling decentralized peer-to-peer agreements

Example: A contract to trade 1000 $MINA for 2000 $USDC in 1 year, regardless of future $MINA price 📊

🔐 Smart contracts on the blockchain enable full tokenization of futures contracts

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:29 +0000

🔐 Smart contracts on the blockchain enable full tokenization of futures contracts

📈 Both long and short positions become tokens, representing a "promise of future asset or money"

This allows partial selling of positions, increasing liquidity, flexibility and reducing risk 💧

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/traditional-futures-require-centralized-clearing-houses
Futures pricing is deterministic, and its main goal is to prevent arbitrage:

💰 Futures Price = Spot Price * e^(rT)
- r: risk-free rate (e.g., $MINA staking yield)
- T: time to maturity

This formula approximates pricing at maturity in both TradFi and DeFi 🧮

Each position (long and short) is subdivided into several fungible tokens, which can be traded…

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:30 +0000

Each position (long and short) is subdivided into several fungible tokens, which can be traded independently

The native token support of Mina Protocol blockchain means that a smart contract encodes both: the futures agreement, and its tokenization 🪙

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/smart-contracts-on-the-blockchain-enable-full-tokenization
🔐 Smart contracts on the blockchain enable full tokenization of futures contracts

📈 Both long and short positions become tokens, representing a "promise of future asset or money"

This allows partial selling of positions, increasing liquidity, flexibility and reducing risk 💧

The DeFi margin for futures contracts differs from TradFi margins, by:

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:30 +0000

The DeFi margin for futures contracts differs from TradFi margins, by:

1️⃣ Gradually increasing over time
2️⃣ Ensuring full collateralization by maturity
3️⃣ Delaying full payment

TradFi margin's main goal is to cover daily settlement gains/losses of the futures position

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/each-position-long-and-short-is-subdivided-into-several
Each position (long and short) is subdivided into several fungible tokens, which can be traded independently

The native token support of Mina Protocol blockchain means that a smart contract encodes both: the futures agreement, and its tokenization 🪙

📈 The margin requirements increase algorithmically over the contract's lifespan

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:31 +0000

📈 The margin requirements increase algorithmically over the contract's lifespan

This ensurer both parties deposit their obligation in full by maturity, while allowing for partial collaterization

Thus leveraging the time value of money, without the need for a trusted party

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/each-position-long-and-short-is-subdivided-into-several
The DeFi margin for futures contracts differs from TradFi margins, by:

1️⃣ Gradually increasing over time
2️⃣ Ensuring full collateralization by maturity
3️⃣ Delaying full payment

TradFi margin's main goal is to cover daily settlement gains/losses of the futures position

Example of gradually increasing margin:

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:31 +0000

Example of gradually increasing margin:

- Day 1: 10% deposit required
- Month 1: 25% required
- Month 2: 50% required
- Month 3 (Maturity): 100% required

This flexibility allows parties to structure payments based on future cash flows 💰

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/the-margin-requirements-increase-algorithmically-over-the
📈 The margin requirements increase algorithmically over the contract's lifespan

This ensurer both parties deposit their obligation in full by maturity, while allowing for partial collaterization

Thus leveraging the time value of money, without the need for a trusted party

The margin in DeFi futures acts as:

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:32 +0000

The margin in DeFi futures acts as:

1️⃣ Traditional margin, as in TradFi
2️⃣ Collateral hedging the counterparty risk
3️⃣ Under-collateralized assurance for a futures contract delivery

Daily/periodic settlement can be incorporated into the dynamic margin requirements

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/the-margin-requirements-increase-algorithmically-over-the
Example of gradually increasing margin:

- Day 1: 10% deposit required
- Month 1: 25% required
- Month 2: 50% required
- Month 3 (Maturity): 100% required

This flexibility allows parties to structure payments based on future cash flows 💰

Smart contract on the blockchain tracks:

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:33 +0000

Smart contract on the blockchain tracks:

1️⃣ Deposited amounts for each party
2️⃣ Required deposits at each checkpoint
3️⃣ Maturity date

It uses this data to automatically enforce the increasing margin schedule 🔐

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/the-margin-in-defi-futures-acts-as
The margin in DeFi futures acts as:

1️⃣ Traditional margin, as in TradFi
2️⃣ Collateral hedging the counterparty risk
3️⃣ Under-collateralized assurance for a futures contract delivery

Daily/periodic settlement can be incorporated into the dynamic margin requirements

If a party fails to meet margin requirements, the smart contract:

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:33 +0000

If a party fails to meet margin requirements, the smart contract:

1️⃣ Terminates the agreement
2️⃣ Transfers deposited assets to the compliant party
3️⃣ Applies penalties to the defaulting party

This liquidation process is executed automatically on-chain 🤖

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/smart-contract-on-the-blockchain-tracks
Smart contract on the blockchain tracks:

1️⃣ Deposited amounts for each party
2️⃣ Required deposits at each checkpoint
3️⃣ Maturity date

It uses this data to automatically enforce the increasing margin schedule 🔐

🛟 The liquidation logic makes the initial required margin a collateral for all of the parties

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:34 +0000

🛟 The liquidation logic makes the initial required margin a collateral for all of the parties

Failure to meet the obligations means a loss of the deposited margin/collateral, either in full or in part

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/smart-contract-on-the-blockchain-tracks
If a party fails to meet margin requirements, the smart contract:

1️⃣ Terminates the agreement
2️⃣ Transfers deposited assets to the compliant party
3️⃣ Applies penalties to the defaulting party

This liquidation process is executed automatically on-chain 🤖

🕑 The later this default occurs, the higher this loss is to the offending party

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:34 +0000

🕑 The later this default occurs, the higher this loss is to the offending party

This aligns with the principle of the time value of money

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/the-liquidation-logic-makes-the-initial-required-margin-a
🛟 The liquidation logic makes the initial required margin a collateral for all of the parties

Failure to meet the obligations means a loss of the deposited margin/collateral, either in full or in part

The tokenization of the long and the short positions of the futures contact allows for trading of…

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:35 +0000

The tokenization of the long and the short positions of the futures contact allows for trading of the positions in a fully decentralized manner, without the need for need for a clearing house

This means no trusted entity or oracles are required, ensuring full decentralization

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/the-liquidation-logic-makes-the-initial-required-margin-a
🕑 The later this default occurs, the higher this loss is to the offending party

This aligns with the principle of the time value of money

The smart contract automates risk management on-chain by:

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:35 +0000

The smart contract automates risk management on-chain by:

1️⃣ Enforcing margin requirements
2️⃣ Handling liquidations
3️⃣ Ensuring contract settlement

Removing the need for trusted third parties and ensuring transparency 🛡️

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/the-tokenization-of-the-long-and-the-short-positions-of-the
The tokenization of the long and the short positions of the futures contact allows for trading of the positions in a fully decentralized manner, without the need for need for a clearing house

This means no trusted entity or oracles are required, ensuring full decentralization

In summary, blockchain-based Tokenized Liquid Futures:

hello@illya.sh (Illya Gerasymchuk) — Mon, 01 Jul 2024 21:00:36 +0000

In summary, blockchain-based Tokenized Liquid Futures:

- Eliminate intermediaries
- Increase transparency
- Enhance liquidity
- Automate risk management
- Provide flexible capital deployment

Thus enabling a disruptive #DeFi use-case over its #TradFi equivalent

📖 Quoted from 2024-07-01 22:00
https://illya.sh/thoughts/the-tokenization-of-the-long-and-the-short-positions-of-the
The smart contract automates risk management on-chain by:

1️⃣ Enforcing margin requirements
2️⃣ Handling liquidations
3️⃣ Ensuring contract settlement

Removing the need for trusted third parties and ensuring transparency 🛡️

Public petition to call them MinaFTs 😄

hello@illya.sh (Illya Gerasymchuk) — Wed, 03 Jul 2024 14:42:11 +0000

Public petition to call them MinaFTs 😄

proof of everything.

hello@illya.sh (Illya Gerasymchuk) — Fri, 26 Jul 2024 23:46:22 +0000

proof of everything.

👀 Tried out the BRICS Pay demo. Gold/#XAU is one of the supported currencies (the only real money…

hello@illya.sh (Illya Gerasymchuk) — Sat, 19 Oct 2024 11:52:31 +0000

👀 Tried out the BRICS Pay demo. Gold/#XAU is one of the supported currencies (the only real money in the list!)

🌏 To be supported cross-border, within every member nation

💳 You can use VISA/Mastercard to load up your account

🇪🇺We urgently need an akin system in the #EU

Something tells me this will be an interesting session 👀

hello@illya.sh (Illya Gerasymchuk) — Tue, 22 Oct 2024 08:25:56 +0000

Something tells me this will be an interesting session 👀

🇯🇵 How does Japan protect bank deposits when banks fail?

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:50:53 +0000

🇯🇵 How does Japan protect bank deposits when banks fail?

🤯 Their deposit insurance system handled 180+ financial institution failures, including the massive 90's banking crisis

👉 Here's how Japan's ¥10M deposit guarantee scheme works: https://illya.sh/blog/posts/deposit-guarantee-scheme-japan-dia-dicj/

🧵

🏦 The Deposit Insurance Corporation of Japan (DICJ), provisioned in the Deposit Insurance Act…

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:50:56 +0000

🏦 The Deposit Insurance Corporation of Japan (DICJ), provisioned in the Deposit Insurance Act (DIA) defines as its goals:

• Deposit insurance
• Financial system stability
• Troubled financial institution resolution

Deposits guarantee is just one of responsibilities

📖 Quoted from 2024-10-27 15:50
https://illya.sh/thoughts/how-does-japan-protect-bank-deposits-when-banks-fail
🇯🇵 How does Japan protect bank deposits when banks fail?

🤯 Their deposit insurance system handled 180+ financial institution failures, including the massive 90's banking crisis

👉 Here's how Japan's ¥10M deposit guarantee scheme works: https://illya.sh/blog/posts/deposit-guarantee-scheme-japan-dia-dicj/

🧵

💴 Coverage limits:

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:51:00 +0000

💴 Coverage limits:
• Regular deposits: Up to ¥10M (~$65k/€60k)
• Payment & settlement accounts: 100% covered

💡Fun fact: During the 90s crisis, ALL deposits were fully protected. Japan gradually reduced this to ¥10M by 2005

📖 Quoted from 2024-10-27 15:50
https://illya.sh/thoughts/the-deposit-insurance-corporation-of-japan-dicj-provisioned
🏦 The Deposit Insurance Corporation of Japan (DICJ), provisioned in the Deposit Insurance Act (DIA) defines as its goals:

• Deposit insurance
• Financial system stability
• Troubled financial institution resolution

Deposits guarantee is just one of responsibilities

🚀 How fast do you get your deposits back?

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:51:04 +0000

🚀 How fast do you get your deposits back?

The Incubator Bank case (2010) shows DICJ timeline in practice:
• Bank failed on Friday
• Deposits returned by Monday

3 days/by next working day to have insured deposits available 🤝

📖 Quoted from 2024-10-27 15:51
https://illya.sh/thoughts/coverage-limits
💴 Coverage limits:
• Regular deposits: Up to ¥10M (~$65k/€60k)
• Payment & settlement accounts: 100% covered

💡Fun fact: During the 90s crisis, ALL deposits were fully protected. Japan gradually reduced this to ¥10M by 2005

💰 DICJ's funding comes from:

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:51:07 +0000

💰 DICJ's funding comes from:

• Self-issued bonds
• Insurance premiums paid by banks
• Borrowed funds from financial institutions & public

In practice, operation financing is heavily relied on debt, making it risky long-term 📈

📖 Quoted from 2024-10-27 15:51
https://illya.sh/thoughts/how-fast-do-you-get-your-deposits-back
🚀 How fast do you get your deposits back?

The Incubator Bank case (2010) shows DICJ timeline in practice:
• Bank failed on Friday
• Deposits returned by Monday

3 days/by next working day to have insured deposits available 🤝

🇯🇵🆚🇪🇺

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:51:09 +0000

🇯🇵🆚🇪🇺
Japan's & EU's deposit guarantee schemes differ⬇️

🇯🇵 DICJ: Active crisis manager (Act 34 of 1971)
🇪🇺 DGS: Mainly deposit protection (Directive 2014/49/EU)

Japan's approach = more intervention power & broader mandate
EU's approach = more focused mandate

📖 Quoted from 2024-10-27 15:51
https://illya.sh/thoughts/dicjs-funding-comes-from
💰 DICJ's funding comes from:

• Self-issued bonds
• Insurance premiums paid by banks
• Borrowed funds from financial institutions & public

In practice, operation financing is heavily relied on debt, making it risky long-term 📈

🚨 The system faced its biggest test during the 90s banking crisis:

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:51:10 +0000

🚨 The system faced its biggest test during the 90s banking crisis:

• 110 financial institutions resolved
• Full deposit protection implemented
• Massive debt-based interventions

DICJ has met its insurance obligations, but at what cost? 🤔

📖 Quoted from 2024-10-27 15:51
https://illya.sh/thoughts/post-1730044269
🇯🇵🆚🇪🇺
Japan's & EU's deposit guarantee schemes differ⬇️

🇯🇵 DICJ: Active crisis manager (Act 34 of 1971)
🇪🇺 DGS: Mainly deposit protection (Directive 2014/49/EU)

Japan's approach = more intervention power & broader mandate
EU's approach = more focused mandate

🇯🇵⚠️ Current risks:

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:51:11 +0000

🇯🇵⚠️ Current risks:

• Heavy reliance on debt
• Large US Dollar & Securities exposure
• Currency devaluation, leading to inflation

These could trigger a 90s-style crisis 2.0 📉

📖 Quoted from 2024-10-27 15:51
https://illya.sh/thoughts/the-system-faced-its-biggest-test-during-the-90s-banking
🚨 The system faced its biggest test during the 90s banking crisis:

• 110 financial institutions resolved
• Full deposit protection implemented
• Massive debt-based interventions

DICJ has met its insurance obligations, but at what cost? 🤔

🎌 While Japan has been successful in resolving hundreds of financial institution failures, the…

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:51:14 +0000

🎌 While Japan has been successful in resolving hundreds of financial institution failures, the debt-heavy approach can only be only effective if the value created by credit is larger than the principal

Otherwise, there's another bubble building up 🫧

📖 Quoted from 2024-10-27 15:51
https://illya.sh/thoughts/current-risks
🇯🇵⚠️ Current risks:

• Heavy reliance on debt
• Large US Dollar & Securities exposure
• Currency devaluation, leading to inflation

These could trigger a 90s-style crisis 2.0 📉

🇯🇵🧠 For a deeper dive into Japan's deposit insurance system, read or listen my article at…

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 15:51:15 +0000

🇯🇵🧠 For a deeper dive into Japan's deposit insurance system, read or listen my article at https://illya.sh/blog/posts/deposit-guarantee-scheme-japan-dia-dicj/

It covers Japan's deposit insurance's:
• Legal framework
• Historical cases
• Risk analysis
• EU comparison

Got questions? Ask me! 👇

📖 Quoted from 2024-10-27 15:51
https://illya.sh/thoughts/while-japan-has-been-successful-in-resolving-hundreds-of
🎌 While Japan has been successful in resolving hundreds of financial institution failures, the debt-heavy approach can only be only effective if the value created by credit is larger than the principal

Otherwise, there's another bubble building up 🫧

🇯🇵🎧 Added an audio version of the article

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Oct 2024 17:40:06 +0000

🇯🇵🎧 Added an audio version of the article

It's an AI-generated podcast of the article using NotebookLM audio overview with custom sources & instructions

🔗 http

🚀🎧 Podcast covering #BRICS Currency on the blockchain is out!

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Nov 2024 21:36:52 +0000

🚀🎧 Podcast covering #BRICS Currency on the blockchain is out!

🔗🔈:

🤖 Smart contracts & #DeFi are an ideal match for #BRICSPay showcased at #BRICS2024 summit. Podcast & article exply why

🎤 AI Audio created with NotebookLM https://

Part of Bitcoin's value derives from the total electricity cost of maintaining a decentralized,…

hello@illya.sh (Illya Gerasymchuk) — Fri, 15 Nov 2024 10:15:51 +0000

Part of Bitcoin's value derives from the total electricity cost of maintaining a decentralized, trustless, immutable ledger of transactions for >15 years

20% of GDP is spent on financial services. Blockchains remove intermediaries & improve efficiency

It's apples to oranges 🤷‍♀️ https:/

Very interesting alternative USD market

hello@illya.sh (Illya Gerasymchuk) — Thu, 21 Nov 2024 12:27:04 +0000

Very interesting alternative USD market

Usual flow:
🇺🇸 buys oil from 🇸🇦, 🇸🇦 reinvest excess back into UST

New flow:
🇸🇦 reinvests excess into 🇨🇳-issued USD bonds

Result:
USD flows to 🇨🇳, instead of 🇺🇸, as the USD-denominated debt (bonds) are issued directly by 🇨🇳

👉 Sold at par

hello@illya.sh (Illya Gerasymchuk) — Sun, 24 Nov 2024 15:06:07 +0000

👉 Sold at par
👉 0% coupon
👉 Unsecured debt
👉 Option to convert to equity at $672/share

For the loan of the principal you're getting an option to buy $MSTR stock at $672 in 2029 - 60% higher than the current share price of ≈ $420

Why not just buy $BTC directly? 🤷‍♀️

Bad news for #USD 👎

hello@illya.sh (Illya Gerasymchuk) — Mon, 02 Dec 2024 16:34:20 +0000

Bad news for #USD 👎

The value of a currency is a direct reflection of the organic demand for it. Sanctions will decrease the demand for US Dollar, via disincentives

Plus, it's the US consumer that will be paying for the tariffs, not the BRICS countries 🤷‍♀️

🚨JUST IN: Quantum Computer Hacked #Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Sat, 14 Dec 2024 16:29:33 +0000

🚨JUST IN: Quantum Computer Hacked #Bitcoin

Satoshi Nakamoto has been suspiciously quiet since the news broke out 🤫

According to experts on social media, the recent advancements in quantum computing have just made Bitcoin obsolete. Of course, neither the market, nor…

🇪🇺 The future of Web3 & DeFi in the EU 🇪🇺

hello@illya.sh (Illya Gerasymchuk) — Wed, 25 Dec 2024 16:44:02 +0000

🇪🇺 The future of Web3 & DeFi in the EU 🇪🇺

Legal compliance is fundamental for wide adoption of Web3 & DeFi. While security audits of DeFi protocols are a common practice, the same is not true for regulatory compliance audits

All investment services in the EU, including those… https://

Are you building DeFi in the EU? Here's what you need to know ⬇️

hello@illya.sh (Illya Gerasymchuk) — Tue, 31 Dec 2024 15:12:58 +0000

Are you building DeFi in the EU? Here's what you need to know ⬇️

At the time of conceptualizing this 'liquid futures protocol' I didn't even know where to start with regard to its legal compliance

A few days ago I finalized a paper exploring how one can legally launch on-chain…

Running LLM models locally really makes you appreciate the 'unlimited' bandwidth, which is a…

hello@illya.sh (Illya Gerasymchuk) — Wed, 22 Jan 2025 16:46:57 +0000

Running LLM models locally really makes you appreciate the 'unlimited' bandwidth, which is a standard offering in most EU countries

🤯 Think about all of those US market outflows due to DeepSeek, Qwen & Co.

hello@illya.sh (Illya Gerasymchuk) — Mon, 03 Feb 2025 13:09:17 +0000

🤯 Think about all of those US market outflows due to DeepSeek, Qwen & Co.

$NVDA's & other AI-related stock crash wasn't just about cheaper AI-compute. The outflow also represents funds that may be potentially invested in the Chinese market

This point is often omitted 🤫 https://

I'm working on an Agent and was debugging why the responses from the LLM come as null/empty

hello@illya.sh (Illya Gerasymchuk) — Wed, 12 Feb 2025 13:29:27 +0000

I'm working on an Agent and was debugging why the responses from the LLM come as null/empty

Turns out function calling is currently broken on DeepSeek ☹️

Yeah crypto & stocks is fun, but have you tried orange juice futures? 😂

hello@illya.sh (Illya Gerasymchuk) — Thu, 27 Feb 2025 17:43:14 +0000

Yeah crypto & stocks is fun, but have you tried orange juice futures? 😂

Almost 50% down since December 🤨 http

Oh btw, this was also about option pricing

hello@illya.sh (Illya Gerasymchuk) — Sun, 09 Mar 2025 21:42:09 +0000

Oh btw, this was also about option pricing

These bonds acted as synthetic call options, which were priced below the market value of calls on $MSTR at the time

Just found GUN, already prototyping

hello@illya.sh (Illya Gerasymchuk) — Sun, 16 Mar 2025 16:49:49 +0000

Just found GUN, already prototyping

It enables a decentralized, reactive, real-time, shared graph layer allowing you to build dApps right in the browser

Every visitor/user of your web app becomes a peer in the network of your application. The peers can communicate events &…

Over 10 years the Russian Central Bank has increased gold holdings by x4.5

hello@illya.sh (Illya Gerasymchuk) — Fri, 21 Mar 2025 12:45:37 +0000

Over 10 years the Russian Central Bank has increased gold holdings by x4.5

🇷🇺 Gold is now 35% of all international reserves held by Russia 🤯

🇺🇸 Comparatively, for USA the number is 5%

This is why Russia and Ruble have been so resilient to sanctions

With the inflation trend…

hello@illya.sh (Illya Gerasymchuk) — Fri, 21 Mar 2025 15:01:15 +0000

With the inflation trend…

not impossible 🤣🤣

Hedge funds are shorting $ETH in record numbers 😳

hello@illya.sh (Illya Gerasymchuk) — Tue, 25 Mar 2025 10:10:03 +0000

Hedge funds are shorting $ETH in record numbers 😳

📈 Institutional investors have increased their reverse purchase agreements exposure ever since the…

hello@illya.sh (Illya Gerasymchuk) — Tue, 25 Mar 2025 13:27:17 +0000

📈 Institutional investors have increased their reverse purchase agreements exposure ever since the central bank interest rates spiked

Repos are shorter-term loans, meaning they present a shorter commitment, thus less risk

Another message is clear: institutions are expecting…

🫧 Debt bubble about to pop

hello@illya.sh (Illya Gerasymchuk) — Tue, 25 Mar 2025 13:41:04 +0000

🫧 Debt bubble about to pop

Borrowing is increasing & collateralization is decreasing

These are symptoms of a highly leveraged economy

Lowest (over)collateralization rate in 10 years. Surely a lot of that is caused by the huge amount of cheap credit issued during COVID, which… http

Microcontrollers fostered IoT - Internet of Things

hello@illya.sh (Illya Gerasymchuk) — Tue, 25 Mar 2025 16:30:34 +0000

Microcontrollers fostered IoT - Internet of Things

Vibe coding is fostering IoV - Internet of Vulnerabilities

But IoT is already IoV 😁

The new GPT 4o image generator is impressive!

hello@illya.sh (Illya Gerasymchuk) — Tue, 25 Mar 2025 20:23:57 +0000

The new GPT 4o image generator is impressive!

You can ask ChatGPT to generate a UI design, and then pass it to Cursor/Claude/V0 for implementation

Character accuracy makes a big difference

The new GPT 4o is also quite good as an image editor

hello@illya.sh (Illya Gerasymchuk) — Tue, 25 Mar 2025 20:48:17 +0000

The new GPT 4o is also quite good as an image editor

It's able to fairly accurately replicate & alter subjects

But maybe they should increase their training set on the anatomy of cats 😂

(expand the image) http

hello@illya.sh (Illya Gerasymchuk) — Tue, 25 Mar 2025 20:49:06 +0000

2nd attempt was much better 😁

hello@illya.sh (Illya Gerasymchuk) — Tue, 25 Mar 2025 20:50:35 +0000

2nd attempt was much better 😁

Do you face the same philosophical issues with your cat?

hello@illya.sh (Illya Gerasymchuk) — Tue, 25 Mar 2025 21:13:12 +0000

Do you face the same philosophical issues with your cat?

I don't think she sees the irony 😡

🤯 GPT-4o new image gen is surprisingly good at generating comics & memes

hello@illya.sh (Illya Gerasymchuk) — Wed, 26 Mar 2025 03:45:51 +0000

🤯 GPT-4o new image gen is surprisingly good at generating comics & memes

Here's an xkcd style webcomic about vibe coding ⬇️ http

The new GPT-4o image generator is cool, but who else thinks that in the next week or so some…

hello@illya.sh (Illya Gerasymchuk) — Wed, 26 Mar 2025 20:25:23 +0000

The new GPT-4o image generator is cool, but who else thinks that in the next week or so some open-source Chinese model will it to dust? 😂🇨🇳

You can probably already find something close to it on huggingface

Today, I asked GPT-4o to create a meme about vibe coding

hello@illya.sh (Illya Gerasymchuk) — Wed, 26 Mar 2025 20:45:21 +0000

Today, I asked GPT-4o to create a meme about vibe coding

But you may need to be an AI language model to understand it 😳

✅ It's confirmed

hello@illya.sh (Illya Gerasymchuk) — Wed, 26 Mar 2025 21:01:28 +0000

✅ It's confirmed

You can now fully automate niche meme pages

With carefully crafted prompts and context it can generate a lot traffic and organic engagement

Architecting your balance sheet around highly speculative & volatile instruments is a good idea,…

hello@illya.sh (Illya Gerasymchuk) — Wed, 26 Mar 2025 21:30:48 +0000

Architecting your balance sheet around highly speculative & volatile instruments is a good idea, until it isn't 💖

Although with 0% coupon the burden here is mostly on the investor 🤷‍♀️

The stock market is starting to resemble a casino more every day…. http

🎉 Congratulations to the American consumer who now has 2 options:

hello@illya.sh (Illya Gerasymchuk) — Wed, 26 Mar 2025 22:36:53 +0000

🎉 Congratulations to the American consumer who now has 2 options:

1. Pay 25% more for the car they want
2. Pay <25% more for a lower-quality domestically produced car

+ The income tax is here to stay ✌️

And you thought the Biden administration was doing questionable moves 😂 htt

🇺🇸 So the car tariffs are also inflationary

hello@illya.sh (Illya Gerasymchuk) — Thu, 27 Mar 2025 15:29:36 +0000

🇺🇸 So the car tariffs are also inflationary

USA cars get credit incentives, by making interest payments tax deductible

So this means more expensive cars + more credit availability for them

You can't make this up 😳

📉 S&P 500, Motor Industry, NASDAQ, Bitcoin - all down

hello@illya.sh (Illya Gerasymchuk) — Thu, 27 Mar 2025 16:18:16 +0000

📉 S&P 500, Motor Industry, NASDAQ, Bitcoin - all down

🥇Meanwhile gold hitting ATHs: http

🚨Update on Ethereum shorts:

hello@illya.sh (Illya Gerasymchuk) — Sat, 29 Mar 2025 00:42:32 +0000

🚨Update on Ethereum shorts:

Latest data shows that institutional investors reduced their short exposure by ≈60%

Not necessarily bullish - a lot of it is taking profits from the record net short positions

+ $1900 is a key weekly support level for #ETH, so a rebound is normal

🚨Trump's Tariffs Update - 🇨🇳, 🇯🇵, 🇰🇷

hello@illya.sh (Illya Gerasymchuk) — Mon, 31 Mar 2025 14:34:38 +0000

🚨Trump's Tariffs Update - 🇨🇳, 🇯🇵, 🇰🇷

Not only tariffs are tanking the US economy, but their strongest partners are looking elsewhere

Unsurprisingly, Asia will find other buyers for their products - they have the upper hand, not 🇺🇸 or 🇪🇺 - a result of perpetual import deficits…

🚨 JUST IN: $87K Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Wed, 02 Apr 2025 17:00:03 +0000

🚨 JUST IN: $87K Bitcoin

This is just a pre-tariffs announcements pump that will sell off once Trump speaks in a few hours, right? 😁

🔴 $BTC, $DXY & $XAU during Trump's tariffs speech

hello@illya.sh (Illya Gerasymchuk) — Wed, 02 Apr 2025 20:56:58 +0000

🔴 $BTC, $DXY & $XAU during Trump's tariffs speech

Interesting to observe the negative correlation between Bitcoin & US Dollar Index

Gold wasn't clearly correlated with either. This makes sense - the tariffs lead to uncertainty regarding the reserve currency & central bank… https://t.co

🚨 🇷🇺🇨🇳🇪🇺🇯🇵 reacting to US tariffs

hello@illya.sh (Illya Gerasymchuk) — Wed, 02 Apr 2025 22:04:44 +0000

🚨 🇷🇺🇨🇳🇪🇺🇯🇵 reacting to US tariffs

The initial FOREX response to tariffs is a net outflow from #USD

US dollar fell against major currencies. The Euro fell against both the Chinese Yuan/renminbi & the Russian Ruble

Interesting, but expected having #RUB & #Yuan gain from this https://

🚨 Bitcoin Reacts To US Tariffs:

hello@illya.sh (Illya Gerasymchuk) — Wed, 02 Apr 2025 22:49:33 +0000

🚨 Bitcoin Reacts To US Tariffs:

As expected, a massive BTC sell-off post Trump's tariffs announcement

The price peaked during the speech, and then dumped down more than 6% so far + US dollar index is down

A move away from riskier assets & USD into Gold & foreign currencies https://

🤯 USD/EUR down 3 cents overnight

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Apr 2025 12:31:40 +0000

🤯 USD/EUR down 3 cents overnight

🇺🇸 An immediate response to Trump/USA import tariffs

This is Bitcoin-level volatility in FOREX

Volatility is a measure of risk. What does this mean for the US Dollar?

🇪🇺 The best countermeasure that EU can take is swapping US securities for Gold

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Apr 2025 16:28:08 +0000

🇪🇺 The best countermeasure that EU can take is swapping US securities for Gold

Gold is inversely correlated with USD. Such a decision can be done today and it will:

1️⃣be a response to the US
2️⃣increase value of EUR
3️⃣minimize consumer impact

Anything else will hurt the economy

🚨 Financial Stress Index Tariffs Update

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Apr 2025 17:33:13 +0000

🚨 Financial Stress Index Tariffs Update

Trump/US tariffs so far:
⬇️ Equity valuation down
⬆️ Volatility up
⬆️ Safe assets up
⬆️ Credit spread up

📈 A perfect setup for the increase of OFR's Financial Stress Index

Let's see - it's updated with a 2 day delay

Remember: FIAT currencies come & go

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Apr 2025 18:08:44 +0000

Remember: FIAT currencies come & go

✨ Only Gold remains ✨ http

🚨🇺🇸 USD M2 Money Supply is almost back at pre-interest rate increase levels

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Apr 2025 10:05:21 +0000

🚨🇺🇸 USD M2 Money Supply is almost back at pre-interest rate increase levels

That QT didn't last after all 🤷‍♀️

🚨🇺🇸USD M2 Money Supply

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Apr 2025 10:19:24 +0000

🚨🇺🇸USD M2 Money Supply

⬆️ 790 days to increase M2 by $6.3T
⬇️ 550 days to decrease M2 by $1.1T
⬆️ 500 days to increase M2 by $1.1T

⏯️ QE never stopped, it merely paused

When inflation is blamed on tariffs, keep this in mind

If you think 🇺🇸USD M2 is bad, look at 🇷🇺Russia's

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Apr 2025 10:35:25 +0000

If you think 🇺🇸USD M2 is bad, look at 🇷🇺Russia's

In 3 years, Ruble DOUBLED in supply. Up by a 100%

How come despite this, Ruble maintained its value in FOREX?

The answer is GOLD, more specifically its expansion in the balance sheet of Central Bank of Russia

It works 🤷‍♀️

🇨🇳China: announces tariffs on 5% of US exports

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Apr 2025 10:48:21 +0000

🇨🇳China: announces tariffs on 5% of US exports

Bitcoin 🫠:

Who's selling silver? 😭

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Apr 2025 19:07:16 +0000

Who's selling silver? 😭

📉 CDFs are down 15% on the day 🤯

I guess it's a tariffs freebie 🤷‍♀️

🤖 I asked Grok 3 why silver is down today

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Apr 2025 19:19:05 +0000

🤖 I asked Grok 3 why silver is down today

DeepSearch said that this is likely due to a stronger USD

But #DXY is also down 😂

Silver back to August 2020 price

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Apr 2025 19:54:51 +0000

Silver back to August 2020 price

After a tariffs-induced pullback of 15% today, silver is now at start of COVID prices

So much inflation that still isn't priced in

It will recover. And a lot!

Russian Ruble vs Euro

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Apr 2025 20:31:40 +0000

Russian Ruble vs Euro

Past 6 months #RUB up against #EUR by 13%

Ruble is up 34% on Euro since January 2025 (YTD)

Switzerland 2 year bond yield went negative

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Apr 2025 23:22:14 +0000

Switzerland 2 year bond yield went negative

Swiss Frank appreciates against major currencies like #EUR & #USD, so investors accept lower (sometimes even negative!) yields

Massive demand for #CHF

Silver Physcial Delivery Demand HIGH

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Apr 2025 12:43:02 +0000

Silver Physcial Delivery Demand HIGH

CME's COMEX & NYMEX Metal Delivery Notices show a MASSIVE demand for physical silver

16.1K futures contract for delivery/physical settlement, up x3 from a year ago

A.K.A. tariffs effect on silver

Investors are HOARDING silver

Source:

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Apr 2025 12:43:49 +0000

Source:

PHYSICAL GOLD RUSH

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Apr 2025 13:33:17 +0000

PHYSICAL GOLD RUSH

It's not just Central Banks anymore

In the first 4 days of April 2025, over 52K COMEX 100 Gold Futures contracts have been requested for physical delivery

Only 4 days in & it's already x2 of January interest

Physical gold in high demand

Financial Stress Index (FSI) UPDATE

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Apr 2025 14:23:07 +0000

Financial Stress Index (FSI) UPDATE

as expected, the risk is increasing

Sustained volatility will drive the rest up

Hedge Funds & High-Risk Loans

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Apr 2025 16:05:29 +0000

Hedge Funds & High-Risk Loans

Leveraged loans are loans issued to high debt/risk entities - akin to subprime loans

Tariffs will hurt solvency. Only way out is FED lowering interest rates, so the debt can be refinanced cheaper

Otherwise the house of cards falls

Institutional longs were just reaching 2022 levels at Q2 2024

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Apr 2025 17:13:19 +0000

Institutional longs were just reaching 2022 levels at Q2 2024

How do you think Q2 2025 will look like?

Tbh $VIX isn't that high (yet )

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Apr 2025 17:50:35 +0000

Tbh $VIX isn't that high (yet )

$VIX is a measure of expected volatility

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Apr 2025 18:32:06 +0000

$VIX is a measure of expected volatility

It's computed from option prices. The price of the option is the insurance/premium that the option seller/short charges

So higher option price = protection against more volatility

🇮🇳 India has accumulated a massive trade deficit

hello@illya.sh (Illya Gerasymchuk) — Sun, 06 Apr 2025 00:04:09 +0000

🇮🇳 India has accumulated a massive trade deficit

India imports from China, Russia & then exports to USA & UAE. The imports are also similar to exports & a lot of it is re-exports

This deficit isn't sustainable of course https://t.co

🇧🇷🇷🇺🇮🇳🇨🇳🇿🇦 BRICS & Tariffs

hello@illya.sh (Illya Gerasymchuk) — Sun, 06 Apr 2025 14:59:00 +0000

🇧🇷🇷🇺🇮🇳🇨🇳🇿🇦 BRICS & Tariffs

Amid the collective chaos there is a group of nations set to benefit from President Trump's tariffs

HINT: it's not the USA ❌🇺🇸

BRICS got geopolitical justification for their existence

Tariff-free zone + local currency trade acts as insurance http

🇮🇳 Indian Rupee's M2 supply makes it even worse

hello@illya.sh (Illya Gerasymchuk) — Sun, 06 Apr 2025 15:54:27 +0000

🇮🇳 Indian Rupee's M2 supply makes it even worse

Net importer + currency inflation is a recipe for depreciation and external dependence

This tariffs-induced volatility is the dream of every trader

hello@illya.sh (Illya Gerasymchuk) — Sun, 06 Apr 2025 16:04:29 +0000

This tariffs-induced volatility is the dream of every trader

Clearing houses are banking from fees & comissions

Finally, risky-assets/DeFi/crypto volatility coming to your favorite regulated exchange

What's even the point of all the regulations in TradFi?

🚨 US Yield Curve UPDATE

hello@illya.sh (Illya Gerasymchuk) — Sun, 06 Apr 2025 16:22:35 +0000

🚨 US Yield Curve UPDATE

Despite the falling $DXY, the yield curve is better (less inverted) than a 1y ago, but worse than 1 month ago

Expect a steeper inversion soon

🇷🇺 #MOEX down 22% since Feb

hello@illya.sh (Illya Gerasymchuk) — Sun, 06 Apr 2025 16:34:01 +0000

🇷🇺 #MOEX down 22% since Feb

Expect it to bounce back very soon - as capital is moved away from USA & USD into alt currencies, which includes Ruble

Once the sanctions against Russia are dropped - that's where Moscow Exchange Index will skyrocket 📈 http

Tariffs are just a distraction from the fact that orange juice futures are down over 50% 🍊

hello@illya.sh (Illya Gerasymchuk) — Sun, 06 Apr 2025 20:43:04 +0000

Tariffs are just a distraction from the fact that orange juice futures are down over 50% 🍊

🚨BREAKING: S&P 500 Fell to 2021 Prices

hello@illya.sh (Illya Gerasymchuk) — Sun, 06 Apr 2025 22:54:13 +0000

🚨BREAKING: S&P 500 Fell to 2021 Prices

#SPX futures / #US500 is down almost 5% since open

≈4 years of gains have been lost

Gold is down 6% from its ATH

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 00:15:18 +0000

Gold is down 6% from its ATH

Still better than equities, crypto & silver

Silver is down almost 20%

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 00:28:21 +0000

Silver is down almost 20%

Insider Trading Before Tariffs

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 16:15:48 +0000

Insider Trading Before Tariffs

If you're curious about how insiders were buying/selling their equity positions, head over to @SECGov's EDGAR & check for Form 4 & 3 filings

Here's the latest one from $AAPL

TIL that you can pay taxes on vested securities/equities directly with that security

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 16:21:40 +0000

TIL that you can pay taxes on vested securities/equities directly with that security

Code F on Form 4

Do not browse insider trading SEC filings on EDGAR directly

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 16:48:46 +0000

Do not browse insider trading SEC filings on EDGAR directly

There's a Python library called edgartools - much better, cleaner & you can directly extract the data

Now go find alpha factors that you can use next time worldwide tariffs are set

edgartools on GitHub

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 16:51:21 +0000

edgartools on GitHub

Ruble is up 2.3% on the USD

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 17:31:39 +0000

Ruble is up 2.3% on the USD

No tariffs + little US exposure + gold works well

One of the core ideas behind the tariffs is to solve US's the trade deficit by incentivizing other…

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 19:57:52 +0000

One of the core ideas behind the tariffs is to solve US's the trade deficit by incentivizing other countries to import from the US - I'm deriving this from the 'tariff' formula

So by importing more from US - you get lower/no tariffs

That won't work. Over the medium term the

Sure, if you:

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 20:04:57 +0000

Sure, if you:

Put tariffs
Lower interest rates
Remove tariffs

the maket will skyrocket

But that also means increased:
Asset bubble
Inflation
Public debt/deficit

Tariff income won't offset it

Monitor the hedge fund's shorts on risky assets, and when the

For net BTC/ETH futures positions by hedge funds, you can check:

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 20:05:44 +0000

For net BTC/ETH futures positions by hedge funds, you can check:

China is the 2nd largest holder of US Treasury bonds - a staggering 23% of their foreign exchange…

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 21:38:08 +0000

China is the 2nd largest holder of US Treasury bonds - a staggering 23% of their foreign exchange reserves

This makes China extremely exposed to US systemic risk. Which is why tariffs will hit them double hard - at exports and at renminbi/Yuan due to falling #DXY

Not saying they can't sustain it though

Of course, this also gives China leverage - if The People Bank's of China (China's Central Bank)…

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 22:03:56 +0000

Of course, this also gives China leverage - if The People Bank's of China (China's Central Bank) dumps their US Securities in the market, it will skyrocket bond yields, by reducing their prices

Who will lend to the US then, and at what premium? And at 125% debt to GDP 😬

🇪🇺🇺🇸US tariffs present a unique opportunity for EU's capital markets

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Apr 2025 22:15:31 +0000

🇪🇺🇺🇸US tariffs present a unique opportunity for EU's capital markets

Billions of $ are flowing out of US markets. Let that liquidity be parked in the EU. All that's needed is inviting conditions

It can start with a small, less-regulated market subsection to allow seamless foreign funds flow

🇷🇺 Russia is immune to US tariffs

hello@illya.sh (Illya Gerasymchuk) — Tue, 08 Apr 2025 11:02:22 +0000

🇷🇺 Russia is immune to US tariffs

Russia's international reserves are as follows:
- 0.007% US Treasury bonds
- 35% Gold

Russia exports <1% to the US. Russia is a net exporter

This makes them protected from US sovereign risk (USD devaluation) & trade risk

Regulated equities market, which is supposed to be low-risk became as volatile as crypto

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Apr 2025 20:47:03 +0000

Regulated equities market, which is supposed to be low-risk became as volatile as crypto

Just look at NASDAQ, S&P500 & Co

Every time I open TradingView it's a +-5%

Maybe more regulations will solve this? 😁

🚨Financial Stress Index Keeps Going Up

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Apr 2025 22:30:53 +0000

🚨Financial Stress Index Keeps Going Up

It has now reached COVID-levels

Combine they with the bond sell off, the falling dollar index & you get a worrying picture

The stock market will rebounce/inflate, but that will increase the premium for debt refinancing over time

Ruble is a gold success story ✨

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Apr 2025 22:37:59 +0000

Ruble is a gold success story ✨

Sanctions, tariffs, raising M2 - it doesn't care

Central Bank Of Russia sold off their US bonds & loaded up on gold

⬇️ US bond prices are down
⬆️ Gold is up
⬆️ Ruble is up against USD

Expect this playbook to be repeated by others

It gets crazier 🤯

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Apr 2025 22:56:55 +0000

It gets crazier 🤯

In the past 3 months, amids the tariff madness - at the time of rush into safe assets - Ruble & Gold head-to-head

You could've either bought gold or Ruble & gained 18% in both cases

And buying ruble isn't easy due to sanctions. Imagine when it opens up

And Ruble is up on Gold since January 🤯

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Apr 2025 23:03:51 +0000

And Ruble is up on Gold since January 🤯

All while Gold is at ATH & it's extremely difficult to buy ruble or any Russia-issued financial instruments due to sanctions

Loading up foreign reserves with gold & selling US Treasury securities worked ✅

To clarify - here you're stating with US Dollar and then buying either Ruble or Gold. It's in this…

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Apr 2025 23:58:35 +0000

To clarify - here you're stating with US Dollar and then buying either Ruble or Gold. It's in this scenario that both investments have a similar yield

If you start with EUR, Ruble actually yields more than Gold - 9.3 vs 11% (in the past 3 months)

US Dollar Index $DXY fell below 100 😳

hello@illya.sh (Illya Gerasymchuk) — Fri, 11 Apr 2025 10:34:13 +0000

US Dollar Index $DXY fell below 100 😳

Just launched

hello@illya.sh (Illya Gerasymchuk) — Fri, 11 Apr 2025 15:54:56 +0000

Just launched

I'll use for short-form posts. Think Twitter/X, but self-hosted under my domain

It's an MVP and for now contains a subset of X posts. Later I'll make it real-timish and cross-post some of my content from here

Coded using Gemini 2.5 Pro

Here's a visual of how it looks like

hello@illya.sh (Illya Gerasymchuk) — Fri, 11 Apr 2025 16:00:11 +0000

Here's a visual of how it looks like

A timeline of thoughts/short-form content/microblog ⬇️

I think now you understand 😁

hello@illya.sh (Illya Gerasymchuk) — Fri, 11 Apr 2025 16:25:54 +0000

I think now you understand 😁

Gold hitting ATH after ATH 🎉

Very concerning for USD

🇺🇸 US Treasury bond yields are acting as a risky asset

hello@illya.sh (Illya Gerasymchuk) — Fri, 11 Apr 2025 18:55:16 +0000

🇺🇸 US Treasury bond yields are acting as a risky asset

Over 2% daily moves is something you see in crypto 👀

And I don't believe the FED will be raising rates - so it's a market-driven US debt premium increase

Lower rates incoming, but sovereign premium will still increase

Looks like 'lowest renminbi/Yuan since 2008' didn't last long 🤷‍♀️

hello@illya.sh (Illya Gerasymchuk) — Sat, 12 Apr 2025 00:28:21 +0000

Looks like 'lowest renminbi/Yuan since 2008' didn't last long 🤷‍♀️

Lower USD Index = USD Devaluation = Higher premium for USD loans = Lower bond prices = Higher…

hello@illya.sh (Illya Gerasymchuk) — Sat, 12 Apr 2025 06:29:18 +0000

Lower USD Index = USD Devaluation = Higher premium for USD loans = Lower bond prices = Higher bond yields

It's all connected

Another important fact to mention regarding Russia, is that on top of sell-off of US securities &…

hello@illya.sh (Illya Gerasymchuk) — Sat, 12 Apr 2025 06:47:13 +0000

Another important fact to mention regarding Russia, is that on top of sell-off of US securities & loading up on gold in record numbers, throughout 2025 Central Bank of Russia has kept interest rates at 21% 🤯

Result = massive savings

However, if EU or US did the same - their economies would collapse overnight

Regarding the bond market collapse ⬇️

hello@illya.sh (Illya Gerasymchuk) — Sat, 12 Apr 2025 06:54:08 +0000

Regarding the bond market collapse ⬇️

US Treasury Securities are the main collateral used in repurchase agreements. Given that these are short-term, the yield spike is unlikely to lead to defaults

However, the fall in bond prices will reduce credit, adding to liquidity crunch

🇩🇪 Germany's GDP is 1/4 of EU's GDP

hello@illya.sh (Illya Gerasymchuk) — Sat, 12 Apr 2025 14:31:40 +0000

🇩🇪 Germany's GDP is 1/4 of EU's GDP

There are 27 countries in the European Union. 26 of them combined represent 3/4 of EU's GDP

Germany, France & Italy represent 52% of EU's GDP

You have to be very specific when talking about EU economy 🇪🇺

1. It will NOT happen

hello@illya.sh (Illya Gerasymchuk) — Sat, 12 Apr 2025 21:33:09 +0000

1. It will NOT happen
2. What 😂

Imagine swapping a part of the peg of the US Dollar - the world reserve currency - from gold to a highly volatile asset

The US Bond market would crash at record numbers. Same for US Dollar index

Not everything is as it seems 👀

hello@illya.sh (Illya Gerasymchuk) — Sun, 13 Apr 2025 08:05:18 +0000

Not everything is as it seems 👀

🚨 Chinese 1 year bond prices are up ≈6%

hello@illya.sh (Illya Gerasymchuk) — Sun, 13 Apr 2025 11:53:10 +0000

🚨 Chinese 1 year bond prices are up ≈6%

Two extremes:
🇺🇸Massive selling pressure on US Treasury securities
🇨🇳Massibe buying pressure on MoF Chinese securities

USD-denominated debt is being swapped for Yuan-denominated debt

Tariffs mainly hurt the US (unsurprisingly)

Yuan downside party really didn't last 😳

hello@illya.sh (Illya Gerasymchuk) — Sun, 13 Apr 2025 12:00:06 +0000

Yuan downside party really didn't last 😳

It went up just as fast as it went down

Yuan up + falling yields on Chinese bonds builds a positive outlook for renminbi

The hinted US securities liquidation/purchase pause by Chinese banks also contributed to this

All expected 🤷‍♀️

🚨US 10 Year Bond yield spikes above 4.5% at open

hello@illya.sh (Illya Gerasymchuk) — Sun, 13 Apr 2025 22:33:55 +0000

🚨US 10 Year Bond yield spikes above 4.5% at open

I previously posted about the move of liquidity towards the Chinese bonds

The USD is facing an increased perceived risk, which in addition to the public debt puts questions on its role as the reserve currency

ChatGPT states that a higher interest rate means bad currency & economy

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Apr 2025 09:05:32 +0000

ChatGPT states that a higher interest rate means bad currency & economy

Lower interest rates on the other hand - a flourishing economy

What GPT-o1 failed to mention is that higher interest rates promote savings - a non-inflationary demand

Keynesian economics in its training 🤷‍♀️

🚨 Ruble is up 30% on USD 2025 YTD

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Apr 2025 09:21:06 +0000

🚨 Ruble is up 30% on USD 2025 YTD

82-68 is a strong support - including pre-Ukraine war liquidity

A small pullback is very likely to happen, but in the medium-long term it's heading towards the 68

Once sanctions are dropped by US & EU - RUB will skyrocket

Look at that liquidity moving from short-term Chinese bonds(CN01Y), to short-term US bonds(US02Y) 👀

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Apr 2025 09:24:43 +0000

Look at that liquidity moving from short-term Chinese bonds(CN01Y), to short-term US bonds(US02Y) 👀

The market liked the removal of tariffs, however, you can't undo the massive volatility over the past 2 weeks

Moreover, US Dollar index is still below 100

This is definitely good news short-term for the USD!

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Apr 2025 09:27:27 +0000

This is definitely good news short-term for the USD!

Today, short-term funding got 1.25% cheaper for the US government, and once the FED lowers the interest rates, the yields will fall more. Now ofc this will lead to inflation & devaluation of USD, but that's a a different story

2Y US Bond is a good factor/signal of FED funds rate, but there's an even better one!

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Apr 2025 09:58:35 +0000

2Y US Bond is a good factor/signal of FED funds rate, but there's an even better one!

CME's 30-day FED Funds futures is a derivative for this exact purpose. The market prices them according to the expectations of upcoming FED Funds Rates

🔗

🇪🇺🇷🇺 So how can you buy Russian securities in the EU?

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Apr 2025 11:14:18 +0000

🇪🇺🇷🇺 So how can you buy Russian securities in the EU?

Since 2022 it's unfeasible. IBKR & KIT Finance suspended trading

Deep researching with LLMs now, but it hasn't been very fruitful so far 🤔

Once the sanctions are lifted you'll see the prices explode

🚨BREAKING: Gold….

hello@illya.sh (Illya Gerasymchuk) — Wed, 16 Apr 2025 15:58:00 +0000

🚨BREAKING: Gold….

Actually, gold has been reaching new ATHs every other day

Not BREAKING anymore - the new normal 🤷‍♀️

Heading for $3.4K now

Pushed updates to https://illya.sh/thoughts/

hello@illya.sh (Illya Gerasymchuk) — Wed, 16 Apr 2025 17:11:46 +0000

Pushed updates to https://illya.sh/thoughts/

The images now lazy load & fixed several issues on desktop

Also updated/synced the content

Nice catch!

hello@illya.sh (Illya Gerasymchuk) — Wed, 16 Apr 2025 18:19:30 +0000

Nice catch!

Indeed, the adjusted March deficit is higher. It also means the adjusted February's deficit is lower

By 'adjusted' I mean had the payments not been shifted due to March 1st falling on a Saturday

🥱 Gold hitting another ATH

hello@illya.sh (Illya Gerasymchuk) — Wed, 16 Apr 2025 19:48:19 +0000

🥱 Gold hitting another ATH

At this point it's boring lol

🚨 Ruble falls below 82 against USD

hello@illya.sh (Illya Gerasymchuk) — Thu, 17 Apr 2025 09:56:57 +0000

🚨 Ruble falls below 82 against USD

I've been writing for a long time about Ruble & the Russian economy, but it's still crazy to watch it play out live

REMEMBER: Russia is still under heavy sanctions, and it's virtually impossible to purchase RUB. Once they're dropped: 📈

🚨68-82 is the next range for USD/RUB

hello@illya.sh (Illya Gerasymchuk) — Thu, 17 Apr 2025 10:01:16 +0000

🚨68-82 is the next range for USD/RUB

A lot of liquidity in that area & expect selling pressure. But there is also selling pressure on the USD

RUB is already up 30% YTD, so expect some pullbacks in the white box region

Grok summarized US tariffs effect very well

hello@illya.sh (Illya Gerasymchuk) — Thu, 17 Apr 2025 12:47:42 +0000

Grok summarized US tariffs effect very well

As well as what will happen to the US economy, and by extension, US Dollar - the most important currency in the world

🚨US Dollar Index going to ≈98.3

hello@illya.sh (Illya Gerasymchuk) — Thu, 17 Apr 2025 14:22:42 +0000

🚨US Dollar Index going to ≈98.3

Current price is a strong monthly level

The next destination is low 98's

🇺🇸🇷🇺 USD/RUB dipped under 82 😳

hello@illya.sh (Illya Gerasymchuk) — Thu, 17 Apr 2025 20:09:05 +0000

🇺🇸🇷🇺 USD/RUB dipped under 82 😳

Combine that with $DXY downtrend & a concerning picture for USD emerges

🇵🇹 Portugal's Central Bank is LOADED with gold

hello@illya.sh (Illya Gerasymchuk) — Fri, 18 Apr 2025 07:52:29 +0000

🇵🇹 Portugal's Central Bank is LOADED with gold

👉 Gold reserves are >80% of total assets

Props to @bancodeportugal for a healthy balance sheet ratio

From now on - only gold-sprinkled pastéis de nata!

🇺🇸🇷🇺 USD is TANKING against Ruble

hello@illya.sh (Illya Gerasymchuk) — Fri, 18 Apr 2025 08:09:59 +0000

🇺🇸🇷🇺 USD is TANKING against Ruble

… on a daily basis 😳

It's only partially tariffs. This has been a trend even prior to them

Russia loaded up on Gold & sold off their US securities. Trade with US is negligible

Russia self-administered an immunity shot

I've referred to gold being 35% of Russian Central Bank's foreign currency reserves, when I in…

hello@illya.sh (Illya Gerasymchuk) — Sat, 19 Apr 2025 00:08:39 +0000

I've referred to gold being 35% of Russian Central Bank's foreign currency reserves, when I in fact meant international reserves

The core idea is unchanged - this is a technicality. Central Bank of Russia reports:

International Reserves = Foreign Exchange Reserves + Gold

🇷🇺 Ruble correlates with gold, becoming a hedge against USD

hello@illya.sh (Illya Gerasymchuk) — Sat, 19 Apr 2025 00:21:51 +0000

🇷🇺 Ruble correlates with gold, becoming a hedge against USD

USD falls against both, Ruble & gold

Russian Central Bank has been continuously increasing their gold holdings, which are currently more than 1/2 the size of their foreign currency reserves & 35% of int'l reserves

🇷🇺 Another reason for a strong Ruble is the consistent negative net claims on general government…

hello@illya.sh (Illya Gerasymchuk) — Sat, 19 Apr 2025 01:12:37 +0000

🇷🇺 Another reason for a strong Ruble is the consistent negative net claims on general government on the balance sheet of Russian Central Bank

Russian government deposited more in the central bank than borrowed from it - meaning NO monetary financing of budget deficit

🇷🇺 Russian government gets a lot of revenue from natural resource exports, such as oil and gas

hello@illya.sh (Illya Gerasymchuk) — Sat, 19 Apr 2025 01:33:22 +0000

🇷🇺 Russian government gets a lot of revenue from natural resource exports, such as oil and gas

This means the government has a lot of Rubles to deposit at the Central Bank

👉A big help towards the CBR maintaining negative net claims on the government

Result = strong Ruble 📈

🇺🇸 USD index bearish/in a downtrend

hello@illya.sh (Illya Gerasymchuk) — Sat, 19 Apr 2025 11:47:09 +0000

🇺🇸 USD index bearish/in a downtrend

5Y timeframe weekly chart shows lower highs & lows

Ever since Trump took office, every $DXY weekly candle has been red

Greatest USD economy in history 🫠

🇷🇺 Russian residents are net creditors to the world

hello@illya.sh (Illya Gerasymchuk) — Sat, 19 Apr 2025 12:26:35 +0000

🇷🇺 Russian residents are net creditors to the world

In Balance of Payments, financial account tracks transactions involving financial assets and liabilities

Positive value = more capital leaving country than entering

Sanctions make it almost impossible to invest in Russia

Ford F-150 sold 2285 units in China 🇨🇳

hello@illya.sh (Illya Gerasymchuk) — Sat, 19 Apr 2025 21:35:48 +0000

Ford F-150 sold 2285 units in China 🇨🇳

Great Wall Cannon (长城炮) - 80K

Unlike the US or most of the world - China has effective factories & supply chains - offering them a myriad of domestic alternatives

China doesn't need Ford. Ford needs China due to imported parts

Christ is risen!

hello@illya.sh (Illya Gerasymchuk) — Sat, 19 Apr 2025 21:39:24 +0000

Christ is risen!

Happy Easter!

🇷🇴 I like how Romania's Central Bank has this image breaking down their international reserves on…

hello@illya.sh (Illya Gerasymchuk) — Sun, 20 Apr 2025 10:08:04 +0000

🇷🇴 I like how Romania's Central Bank has this image breaking down their international reserves on their homepage

However, I didn't understand why it links to November 2024 data, when March 2025 data is already available 😁

Gold reserves are ≈12% here

🇷🇴 National Bank of Romania's gold reserves are ≈13% of their international reserves as of March…

hello@illya.sh (Illya Gerasymchuk) — Sun, 20 Apr 2025 10:16:47 +0000

🇷🇴 National Bank of Romania's gold reserves are ≈13% of their international reserves as of March 2025

I like how they added the paragraph in red 😁

Gold reserves unchanged - value raising. Get used to this trend

The US Dollar index will not enjoy this 😬

hello@illya.sh (Illya Gerasymchuk) — Sun, 20 Apr 2025 23:32:41 +0000

The US Dollar index will not enjoy this 😬

3 days later… and $DXY is at ≈98.3 😁

hello@illya.sh (Illya Gerasymchuk) — Mon, 21 Apr 2025 03:03:01 +0000

3 days later… and $DXY is at ≈98.3 😁

🇺🇸UPDATE: USD Index in fact did NOT enjoy this

hello@illya.sh (Illya Gerasymchuk) — Mon, 21 Apr 2025 04:52:35 +0000

🇺🇸UPDATE: USD Index in fact did NOT enjoy this

#DXY down over 1% today, currently at 98.3

It's almost like aggressively weaponizing the currency erodes the trust in it. Who knew!

🚨UPDATE: Gold has now reached $3400

hello@illya.sh (Illya Gerasymchuk) — Mon, 21 Apr 2025 07:06:48 +0000

🚨UPDATE: Gold has now reached $3400

All time highs, followed by more all time highs

Remember: gold is not increasing in value, but rather the underlying currencies are falling in value

Expect this trend to continue

🇷🇺 Russian Central Bank key interest rate is at 21%

hello@illya.sh (Illya Gerasymchuk) — Mon, 21 Apr 2025 14:15:22 +0000

🇷🇺 Russian Central Bank key interest rate is at 21%

3Y Russian Federation bonds are at ≈16.5% yield

The market is pricing in upcoming rate cuts

@AskPerplexity and @grok will tell you that Ruble & Russian economy are in a bad state. The reality is different

🚀 Pushed an update to my homepage at https://illya.sh/

hello@illya.sh (Illya Gerasymchuk) — Tue, 22 Apr 2025 16:42:50 +0000

🚀 Pushed an update to my homepage at https://illya.sh/

Added a link to https://illya.sh/thoughts/ to which I have been exporting a lot of my tweets

Making 'My Thoughts' button exactly like I wanted took a few iterations and custom contexting with Gemini 2.5 Pro

🚀 Updated https://illya.sh/thoughts/

hello@illya.sh (Illya Gerasymchuk) — Tue, 22 Apr 2025 19:29:19 +0000

🚀 Updated https://illya.sh/thoughts/

- Dark/Light mode automatic + toggleable (click on profile image)
- More compact design
- Large image preview (on click) fixed on mobile

My latest X posts are now also live

🚨 Short-term USD risk is up

hello@illya.sh (Illya Gerasymchuk) — Tue, 22 Apr 2025 22:21:07 +0000

🚨 Short-term USD risk is up

Premium/yield is a measure a risk

Imagine you're purchasing a stock of a company. The CEO of that company makes hostile comments towards its financial division

Does the required return to cover the risk of that company increase or decrease?

A moment of appreciation for how the US Treasury reports the major sovereign holders of securities…

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 09:29:07 +0000

A moment of appreciation for how the US Treasury reports the major sovereign holders of securities in this plain HTML table

Clear, lightweight and works on every device

There's also a plain text version, but it's not as neatly formatted

🇯🇵Bank of Japan just released their 10 day account/balance sheet statements

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 10:04:55 +0000

🇯🇵Bank of Japan just released their 10 day account/balance sheet statements

💰2025 YTD:

- Gold holdings stable
- Foreign currencies down
- Cash up
- JGB down
- Total assets down

Signs of QT, but it won't last. Soon, the balance sheet will expand again. High exposure to USD.

🇯🇵 Gemini 2.5 Pro Deep Research says Bank of Japan will continue with QT

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 10:13:25 +0000

🇯🇵 Gemini 2.5 Pro Deep Research says Bank of Japan will continue with QT

I say they will switch (back) to QE soon

By QE I mean expansion of balance sheet, combined with low/negative key interest rates

Let's see who's right

🇯🇵 BOJ's gold holdings have been constant for 10 years

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 10:30:00 +0000

🇯🇵 BOJ's gold holdings have been constant for 10 years

But gold value has skyrocketed - does that mean Japan has been selling gold?

No. Articles 3 & 13 of Accounting Rules of BOJ imply that gold holdings are recorded at book value/purchase value, rather than market/spot price

🇯🇵Article 3 of Accounting Rules of the Bank of Japan states that "generally accepted principles of…

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 10:34:33 +0000

🇯🇵Article 3 of Accounting Rules of the Bank of Japan states that "generally accepted principles of corporate accounting" shall be used for BOJ's accounting

This defines the framework of how assets and liabilities are values in the central bank's balance sheet

Generally accepted principles of corporate accounting are:

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 10:40:19 +0000

Generally accepted principles of corporate accounting are:

- Historical cost - asset value is recorded at book/acquisition value
- Prudence/Conservatism - decrease the asset value in the balance sheet if it has fallen in value. Unrealized gains are ignored

🇯🇵BOJ abides by them

🇯🇵Article 13 of Accounting Rules of the BOJ defines special valuation rules for securities:

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 10:47:19 +0000

🇯🇵Article 13 of Accounting Rules of the BOJ defines special valuation rules for securities:

1️⃣ Yen bonds at amortized cost
2️⃣ Foreign currency bonds at market value
3️⃣ Stocks, ETFs, J-REITs at MA cost

Since gold is not a security, it falls under Article 3 - book value

🇨🇳China has been increasing their gold reserves YTD

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 11:02:18 +0000

🇨🇳China has been increasing their gold reserves YTD

Gold price keeps going up - major central banks continue to load up

Gold is a hedge against USD. Tariffs are a medium of USD weaponization

👉 Expect US securities sell-off for gold by People's Bank of China

🇺🇸🇨🇳Here's why trade war with China will hurt the US

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 11:19:53 +0000

🇺🇸🇨🇳Here's why trade war with China will hurt the US

The economic relationship between US & China is:
1️⃣US pays USD for Chinese goods
2️⃣China re-invests USD back into US bonds

Thus, the same USD comes back to US!

Tariffs = less imports = less US bond investment = higher yield

Upwards retracements for US Dollar Index are normal

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 12:05:15 +0000

Upwards retracements for US Dollar Index are normal

$DXY fell to ≈98.3 as I previously predicted

That whole area is a monthly support level, thus a source & trigger for massive amounts of liquidity

It's not only FOREX, but also the world reserve currency

🇷🇺 Ruble outflows into USD 🇺🇸

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 19:08:18 +0000

🇷🇺 Ruble outflows into USD 🇺🇸

A lot of liquidity moved from RUB back into USD. This is also telling by the rebounded USD index

But gold will appreciate further. Russian Central Bank's massive gold reserves will pay off

🇷🇺 Ruble is correlating with gold

hello@illya.sh (Illya Gerasymchuk) — Wed, 23 Apr 2025 21:45:06 +0000

🇷🇺 Ruble is correlating with gold

This also explains the recent fall in price. Gold went down against USD & so did RUB

Such a retracement after multiple consecutive ATHs is expected

Fundamentals are still on the side of gold

🧠 Remember: gold is 35% of Russia's int'l reserves

Correlation between Ruble & Gold 🇷🇺🥇:

hello@illya.sh (Illya Gerasymchuk) — Thu, 24 Apr 2025 11:08:57 +0000

Correlation between Ruble & Gold 🇷🇺🥇:

Gold up ➡️ Ruble up
Gold down ➡️ Ruble down
Gold sideways ➡️ Ruble sideways

Russia could make RUB gold-backed, make RUB convertible to gold on demand & position RUB as a 'trustless'/money-backed currency

Already halfway through there

Now that gold is down & below $3.3K, it's a good time to say this:

hello@illya.sh (Illya Gerasymchuk) — Fri, 25 Apr 2025 10:00:33 +0000

Now that gold is down & below $3.3K, it's a good time to say this:

🎉 New ATH coming very soon 🎉

In the time of political, civil & economic ambiguity - there is only one recourse - Au

Lower interest rates & QE are coming soon - FIAT down, gold up

💾 Save this & check back

Regarding the 1492 'gold top' & 533 years breakeven - the information is misleading

hello@illya.sh (Illya Gerasymchuk) — Fri, 25 Apr 2025 10:30:53 +0000

Regarding the 1492 'gold top' & 533 years breakeven - the information is misleading

These price extrapolations made a lot of assumptions & simplifications

Perhaps most importantly, pre-1700's gold prices were fixed by the government - not a trade/free market derived price

Let's see how China's US bond holdings evolve from hereon 🇨🇳🇺🇸

hello@illya.sh (Illya Gerasymchuk) — Fri, 25 Apr 2025 13:39:04 +0000

Let's see how China's US bond holdings evolve from hereon 🇨🇳🇺🇸

⚠️ Regarding CME COMEX 100 Gold Futures:

hello@illya.sh (Illya Gerasymchuk) — Sat, 26 Apr 2025 09:15:38 +0000

⚠️ Regarding CME COMEX 100 Gold Futures:

👉 Notice period begins 2 business days before the first day of the contract month

📅 So these are YTD values are starting from March 28th, not April 1st (DLV665-T)

The core idea remains the same - this is just a technicality of TradFi

Rest of April was relatively uneventful 😴

hello@illya.sh (Illya Gerasymchuk) — Sat, 26 Apr 2025 09:29:40 +0000

Rest of April was relatively uneventful 😴

≈50% of all gold physical delivery notices were filed on March 28th

I've learned that these are typical proportions for 1st notice day

Last intent/notice day is on April 29th

📆 YTD April is the 2nd largest month in terms of volume

🚨GDP is a useless metric…

hello@illya.sh (Illya Gerasymchuk) — Sat, 26 Apr 2025 13:48:41 +0000

🚨GDP is a useless metric…

…unless you combine it with additional context

If $1 billion is credited into an economy, a significant portion of that will make it into GDP, thus increasing it. That debt may be low quality/default

You need Debt to GDP, exports to GDP, etc

Many boast about US's higher GDP than EU without looking at the bigger picture

hello@illya.sh (Illya Gerasymchuk) — Sat, 26 Apr 2025 14:02:53 +0000

Many boast about US's higher GDP than EU without looking at the bigger picture

US/EU balance:
🇺🇸 is a net importer from the 🇪🇺

World:
🇪🇺: Net exporter
🇺🇸: Net importer

Debt to GDP:
🇪🇺: 81%
🇺🇸: 123%

Exports as % of GDP:
🇪🇺: 52%
🇺🇸 : 11%

👉 You must always contextualize GDP 👈

CME publishes daily data on physical settlement on gold futures

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Apr 2025 12:25:49 +0000

CME publishes daily data on physical settlement on gold futures

The problem is that it's PDFs with numbers

Some interesting alpha factors can be extracted from this 💡

Maybe making a website to visualize, interpret & combine that data would be useful 👀

I asked ChatGPT o3 what will happen to the economy of the US, if USD index goes down & Treasury…

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Apr 2025 12:36:02 +0000

I asked ChatGPT o3 what will happen to the economy of the US, if USD index goes down & Treasury bond yields go up

It correctly pointed out that for a heavily indebted net importer - these are not good news

However, the risk is far beyond than just stagflation ⬇️

🚨 ETH & BTC shorts update:

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Apr 2025 14:52:42 +0000

🚨 ETH & BTC shorts update:

Short positions on Bitcoin & Ethereum are gradually reducing

Institutional net position on cryptocurrencies is still short, but only a half from the start of the year

Commercial paper is unsecured short-term debt issued by large, creditworthy companies

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Apr 2025 19:56:10 +0000

Commercial paper is unsecured short-term debt issued by large, creditworthy companies

In practice, it's a short-term promissory note - so something a company would use for short-term financing, perhaps for meeting working capital needs

Promissory notes are very simple legal documents, generally 1 page

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Apr 2025 20:03:06 +0000

Promissory notes are very simple legal documents, generally 1 page

Unlike bonds, it has no coverants, no trustee & no collateral

Financial markets are defined by legal documents with math formulas/values

Promissory notes are very simple legal documents. It looks like this ⬇️

⏰ Reminder to do a deep dive into funding rates, if you still haven't

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Apr 2025 21:47:23 +0000

⏰ Reminder to do a deep dive into funding rates, if you still haven't

You can earn a yield on futures though delta neutral positions

Basis/carry yield in expiring futures ≈ funding rate in perpetual futures

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Apr 2025 23:51:29 +0000

Basis/carry yield in expiring futures ≈ funding rate in perpetual futures

Both converge futures price with spot via an arbitrage incentive - long undervalued, short overvalued

Profits are realized once at expiry for basis, and periodically for funding rate (e.g. every 8h)

Catastrophe bonds (cat bonds) work by having an investor pool deposit 100% of collateral and earn…

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Apr 2025 10:05:35 +0000

Catastrophe bonds (cat bonds) work by having an investor pool deposit 100% of collateral and earn ≈risk free rate + premium paid by the insured

If the covered event occurs, investors lose a proportionate part of their principal, as the insured gets repaid from the collateral

🚨Gold UP - exactly as expected 😁

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Apr 2025 15:34:33 +0000

🚨Gold UP - exactly as expected 😁

Today's uptrend continues

🚨🇺🇸 USD Index UPDATE - it's down:

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Apr 2025 20:17:38 +0000

🚨🇺🇸 USD Index UPDATE - it's down:

As expected - USD index is back down - falling sharply below 98

Covered bonds are issued by a financial institution (e.g. bank) & include a claim on both issuer's…

hello@illya.sh (Illya Gerasymchuk) — Thu, 01 May 2025 19:29:05 +0000

Covered bonds are issued by a financial institution (e.g. bank) & include a claim on both issuer's assets & an additional collateral in the form of a pool of assets

Investor has double recourse on issuer's default event:
1️⃣ Issuer's assets
2️⃣ Collateral pool

I've said this before, but I'm still amazed daily by how much LLMs have augmented the learning…

hello@illya.sh (Illya Gerasymchuk) — Thu, 01 May 2025 19:47:52 +0000

I've said this before, but I'm still amazed daily by how much LLMs have augmented the learning process

A much more efficient way of information retrieval.
Don't overthink the prompts - type or dictate your question, however unclear it is - neural networks will figure it out 🧠

⚠️It's important not to interpret the net notional futures positions simply as short - bearish,…

hello@illya.sh (Illya Gerasymchuk) — Thu, 01 May 2025 19:56:15 +0000

⚠️It's important not to interpret the net notional futures positions simply as short - bearish, long - bullish

There are several reasons why futures may be short & the sentiment is still bullish - e.g. basis trade, funding fee (for perpetual futures). Same for long/bearish

Google + Zero Knowledge Proofs = ❤️🔐

hello@illya.sh (Illya Gerasymchuk) — Fri, 02 May 2025 12:18:36 +0000

Google + Zero Knowledge Proofs = ❤️🔐

ZKPs will allow you to prove your age to other apps via Google Wallet - e.g. a proof that you are >18

AFAIK you'll upload your ID, Google BE verifies & signs it

Integrate with @MinaProtocol schemes & Android goes on the 22KB blockchain 😳

WOW

hello@illya.sh (Illya Gerasymchuk) — Fri, 02 May 2025 15:20:56 +0000

WOW

US 10 Year bond yields are up 2.24% today

🇪🇺👩‍⚖️ EU Securitisation TL;DR

hello@illya.sh (Illya Gerasymchuk) — Fri, 02 May 2025 15:32:08 +0000

🇪🇺👩‍⚖️ EU Securitisation TL;DR

Securitisation of subprime loans was a key factor in 2007-11 financial crisis

EU Regulation 2017/2402 aims to address that by detailing how risk should be managed mathematically & how to distribute it among the parties in securitisation operations

⭐️ May 9th 1945: The Red Army, lead by Zhukov, raises the Soviet flag over Reichstag

hello@illya.sh (Illya Gerasymchuk) — Thu, 08 May 2025 23:58:59 +0000

⭐️ May 9th 1945: The Red Army, lead by Zhukov, raises the Soviet flag over Reichstag

Nazi Germany has been defeated

≈73 million Soviets were killed or injured for the world's freedom. Today, we celebrate their lives

С Днём Победы! 🥳

🇷🇺🇺🇦🇧🇾🇺🇿🇰🇿🇬🇪🇦🇿🇱🇹🇲🇩🇱🇻🇰🇬🇹🇯🇦🇲🇹🇲🇪🇪

Note: the actual raising of the flag happened on April 30th, but May 9th is the day of celebration…

hello@illya.sh (Illya Gerasymchuk) — Fri, 09 May 2025 00:00:58 +0000

Note: the actual raising of the flag happened on April 30th, but May 9th is the day of celebration of Red Army's WW II victory

It's celebrated today throughout slavic & ex-Soviet countries

🇷🇺 TIL Russia has a National Wealth Fund

hello@illya.sh (Illya Gerasymchuk) — Fri, 09 May 2025 13:40:18 +0000

🇷🇺 TIL Russia has a National Wealth Fund

Excess oil & gas profits are credited to NWF

NWF funds are used to finance government deficit, instead of relying on debt issuance of Ruble (government bonds). Inflation-free deficit financing

🇪🇺 We need this in the EU for Euro

How does the Russian government get the oil & gas revenue?

hello@illya.sh (Illya Gerasymchuk) — Fri, 09 May 2025 14:38:00 +0000

How does the Russian government get the oil & gas revenue?

👉 Heavy taxation 👈

So no matter if you're public or private - you pay for per extracted unit of natural resource

This income is directly tied to the budget & NWF - which is then debited or credited, base on target

🇷🇺 Russia announced that they will cover their 2025 budget deficit not through the issuance of…

hello@illya.sh (Illya Gerasymchuk) — Fri, 09 May 2025 21:13:37 +0000

🇷🇺 Russia announced that they will cover their 2025 budget deficit not through the issuance of debt via government bonds, but via the National Reserve Fund - funded by natural resource surpluses

👉 Good news for the Ruble, of course

👉 Bond yields went down - 10Y is down ≈-3%

⚡️You can now create GOLD from lead⚡️

hello@illya.sh (Illya Gerasymchuk) — Sat, 10 May 2025 14:00:02 +0000

⚡️You can now create GOLD from lead⚡️

1g gold = two quintillion dollars ($2 × 10¹⁸)

1 gold ring contains x170 billion more gold that LHC produced over 4 years

Oh, and that newly minted Au fragments into other particles almost immediately 😁

🇺🇸 2Y bond up 3% percent to a 4% yield 😳

hello@illya.sh (Illya Gerasymchuk) — Mon, 12 May 2025 13:40:37 +0000

🇺🇸 2Y bond up 3% percent to a 4% yield 😳

10Y yield also up & approaching 4.5%

At least USD index is back above 100 for now

🇺🇸🇨🇳This makes no sense:

hello@illya.sh (Illya Gerasymchuk) — Mon, 12 May 2025 14:20:01 +0000

🇺🇸🇨🇳This makes no sense:

1️⃣ USA gets themselves into a net importer, 130% debt to GDP & higher refinancing costs

2️⃣ 🇺🇸 became so dependent on China, that 🇺🇸 economy can't survive with the tariffs

3️⃣ Now, the (not so good) student is lecturing the teacher?

Why would 🇨🇳 listen?

🇷🇺 Budget deficit financing through the National Reserve Fund instead of bond issuance is one of…

hello@illya.sh (Illya Gerasymchuk) — Mon, 12 May 2025 14:32:12 +0000

🇷🇺 Budget deficit financing through the National Reserve Fund instead of bond issuance is one of the reasons why Ruble and the Russian bond yields have been doing so good

🇺🇸 $DXY is up - but not against $RUB 🇷🇺

Fundamentals speak louder than words

🇷🇺 Russian Central Bank currently has interest rates at 21%

hello@illya.sh (Illya Gerasymchuk) — Mon, 12 May 2025 14:40:34 +0000

🇷🇺 Russian Central Bank currently has interest rates at 21%

Yet the yield on a 10Y bond is 15.6%

I've previously written that the market is both, pricing in upcoming low(er) rates & paying a premium to stay in Ruble

Today, I found the targets for 2025 & 2026

It's a mystery why US bond yields are skyrocketing

hello@illya.sh (Illya Gerasymchuk) — Mon, 12 May 2025 14:46:22 +0000

It's a mystery why US bond yields are skyrocketing

Higher yield = higher risk, BUT the US has been doing nothing, but irradiating confidence, respect & cooperation 🤯

🤯 Of course temporary, but still - Gold down 3% today

hello@illya.sh (Illya Gerasymchuk) — Mon, 12 May 2025 17:47:43 +0000

🤯 Of course temporary, but still - Gold down 3% today

Outflows into equities

However, some gold-linked currencies like Ruble are up 2.5%

Volatility is a measure of risk. Gold volatility is an expression of the baseline systemic risk

Information Ratio is a risk-adjusted measure of how good your portfolio performs against the…

hello@illya.sh (Illya Gerasymchuk) — Sat, 17 May 2025 14:00:25 +0000

Information Ratio is a risk-adjusted measure of how good your portfolio performs against the market average/benchmark

📈 Risk=how much your portfolio return deviates from benchmark
💡IR=1: for every 1% of risk there is 1% return
👉Look for IR>1

🔑 metric in quantitative finance

There is also ex-ante Information Ratio, i.e. the expected future IR, based on:

hello@illya.sh (Illya Gerasymchuk) — Sun, 18 May 2025 17:15:28 +0000

There is also ex-ante Information Ratio, i.e. the expected future IR, based on:

1️⃣ How accurate your forecasts are (IC)
2️⃣ Num independent investments (BR)
3️⃣ How effectively your strategy can be executed(TC)

👉 Allows you to model risk-adjusted prediction of investment returns

30Y US bond yield just crossed 5% 😳

hello@illya.sh (Illya Gerasymchuk) — Mon, 19 May 2025 08:46:36 +0000

30Y US bond yield just crossed 5% 😳

Scraping the ≈5.22% from 2023

👉(Soon) highest yield in >17 years!

Last time yields were consistently this high was 2007. But a lot of QE policies came in force after the 2007-2011 crisis, so rates were naturally higher back then

The 5 year gold char is wild 📈

hello@illya.sh (Illya Gerasymchuk) — Mon, 19 May 2025 08:49:04 +0000

The 5 year gold char is wild 📈

Regarding global skyrocketing bond yields - it depends where you're looking 😄

hello@illya.sh (Illya Gerasymchuk) — Mon, 19 May 2025 11:07:56 +0000

Regarding global skyrocketing bond yields - it depends where you're looking 😄

Sovereign bond yields up: 🇺🇸🇯🇵🇬🇧🇪🇺
Sovereign bond yields down: 🇷🇺🇨🇳

I've been posting numerous explanations for of this - all very expected

Ever since I wrote this about Japan's easing monetary policy - the yields on 🇯🇵 30 year bonds are…

hello@illya.sh (Illya Gerasymchuk) — Mon, 19 May 2025 11:41:15 +0000

Ever since I wrote this about Japan's easing monetary policy - the yields on 🇯🇵 30 year bonds are up more than x2

Japan heavily relies on debt. Today, Japan has to pay 123% more for that debt than they did 2 years ago

Solutions:
1️⃣ Default
2️⃣ Inflate Yen

Hello inflation 👋

It's very okay to leverage, as long as you are sufficiently hedging the risk. In practice this…

hello@illya.sh (Illya Gerasymchuk) — Mon, 19 May 2025 11:52:21 +0000

It's very okay to leverage, as long as you are sufficiently hedging the risk. In practice this means that you are explicitly quantifying & accepting a certain percentage of risk in exchange for a certain return/alpha

Btw I've since learned that gold is only ≈10% of total reserves of the Portuguese Central bank -…

hello@illya.sh (Illya Gerasymchuk) — Mon, 19 May 2025 11:58:08 +0000

Btw I've since learned that gold is only ≈10% of total reserves of the Portuguese Central bank - that's low

It's 80% of their international reserves - those are basically regulation-defined ratios that banks must maintain (look into BASEL rules if curious)

Here's why bond yields skyrocketing worldwide ⬇️

hello@illya.sh (Illya Gerasymchuk) — Mon, 19 May 2025 12:20:39 +0000

Here's why bond yields skyrocketing worldwide ⬇️

Countries own a lot of US debt (bonds)
Moody's downgraded the US credit rating

Now, countries are at a higher risk of default, because the US debt they own is now less valuable = higher chance of country's default

(simplified)

🇷🇺 Russian Bond Yield Curve Is Inverted

hello@illya.sh (Illya Gerasymchuk) — Tue, 20 May 2025 12:06:27 +0000

🇷🇺 Russian Bond Yield Curve Is Inverted

An inverted yield curve is usually a bad sign (e.g. recession)

However, 🇷🇺's fundamentals are healthy

Why inverted? 🇷🇺 Central Bank's 21% key interest rate, or rather the expectation of it going down, is what's pushing this shape

🇺🇸 Good morning,

hello@illya.sh (Illya Gerasymchuk) — Tue, 20 May 2025 13:31:45 +0000

🇺🇸 Good morning,

It's another green day for US bond yields

🚀 Updated My Thoughts Section

hello@illya.sh (Illya Gerasymchuk) — Tue, 20 May 2025 18:21:14 +0000

🚀 Updated My Thoughts Section

Now, each thought has:
👉 A unique shareable page/link
👉 OpenGraph images with the exact text of the thought

So you don't even need to open the page when reading the thought - it's in the link's preview

Example:

🇺🇸 US bond yields are at their ≈2006 levels

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 May 2025 10:58:33 +0000

🇺🇸 US bond yields are at their ≈2006 levels

🏦 Current FED Funds rate is about the same as it was in '06

💰 The US Dollar Index is significantly higher today than in '06

High volatility in the bond market became a norm. Volatility & risk go hand-in-hand

Concerning!

A month ago me and Gemini 2.5 Pro Deep Research had a disagreement

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 May 2025 11:48:46 +0000

A month ago me and Gemini 2.5 Pro Deep Research had a disagreement

🇯🇵 Gemini said Japan will continue with QT, while I think they will be back to QE soon

With Japanese bond yields at ATHs - which one of the scenarios do you find more likely? 😁

🚨🇺🇸 30Y bond yield is up 132 bp in 1h

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 May 2025 19:12:27 +0000

🚨🇺🇸 30Y bond yield is up 132 bp in 1h

30 year US bond is not only trading above 5%, but had its price fall by ≈1.34% in the short span of 60 minutes

And you thought crypto & meme coins were volatile 😂

🇨🇭Not all European bonds are crashing

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 May 2025 19:20:18 +0000

🇨🇭Not all European bonds are crashing

The yields on the 10 year Swiss bond is actually down ≈40% over the past 3 months, although up ≈12% over 6 months

Who's ready for a new gold ATH? 🙋

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 May 2025 21:14:06 +0000

Who's ready for a new gold ATH? 🙋

You don't have to guess - just look at the systemic raising bond yields across all maturities & multiple sovereigns

🤯 The year is 2002…

hello@illya.sh (Illya Gerasymchuk) — Thu, 22 May 2025 11:44:27 +0000

🤯 The year is 2002…

US bond yields are at the same high levels as they were in 2002… That's 23 years ago

In 2002 US national debt was x6 SMALLER than now

5.1% now is not the same as 5.1% before - it's worse. Much more debt to refinance & pay interest

Of course - context is always needed

hello@illya.sh (Illya Gerasymchuk) — Thu, 22 May 2025 11:52:25 +0000

Of course - context is always needed

In 2002 Fed Funds Rate was x3 smaller

At that time, rates were higher overall

To find rates as small as in 2002, you'd need to go back to the 1960's 😳

For 15 years now, US had effectively been under QE financing - cheap debt

🏦🫧

Gold is having its 'calm before the storm' moment 😄

hello@illya.sh (Illya Gerasymchuk) — Thu, 22 May 2025 12:06:38 +0000

Gold is having its 'calm before the storm' moment 😄

New all time high is coming very soon to all markets close to you

🚀📚 Learn ANYTHING with AI fast:

hello@illya.sh (Illya Gerasymchuk) — Thu, 22 May 2025 18:14:01 +0000

🚀📚 Learn ANYTHING with AI fast:

1️⃣ Screenshot what you don't understand (e.g. book page)

2️⃣ Open ChatGPT*, attach screenshot & dictate your question - no matter how vague/unclear it is

3️⃣ Recurse & iterate until you understand

Always validate your understanding

* any LLM

⚡️ Crypto market cap down 2.6% today

hello@illya.sh (Illya Gerasymchuk) — Fri, 23 May 2025 20:03:02 +0000

⚡️ Crypto market cap down 2.6% today

Explains the overall pullback across prices. Some went into gold & bonds (yields are down today)

Could head a little lower - but definitely temporary. Expect inflows/increase soon

👉 M2 Supply ≠ Liquidity 👈

hello@illya.sh (Illya Gerasymchuk) — Sun, 25 May 2025 15:40:10 +0000

👉 M2 Supply ≠ Liquidity 👈

M2 is only a part of the total liquidity

🔎 Here's an example:
Repurchase agreements market adds ≈$17T in the form of security-backed short-term credit, thus increasing available currency

M2 does not account for the repo market

🏦 Quantitative Easing (QE) by a Central Bank (CB) increase both - its assets & liabilities

hello@illya.sh (Illya Gerasymchuk) — Sun, 25 May 2025 17:04:37 +0000

🏦 Quantitative Easing (QE) by a Central Bank (CB) increase both - its assets & liabilities

👇
QE = CB buys securities from commercial banks
👆

This involves:
1️⃣ Transfer of securities to CB (asset UP)
2️⃣ Credit the bank's reserve account (liability UP)

⚡️ US Bond yields directly affect USD liquidity

hello@illya.sh (Illya Gerasymchuk) — Sun, 25 May 2025 19:51:46 +0000

⚡️ US Bond yields directly affect USD liquidity

Here's how 👇

1️⃣ Repo + reverse repo market provides $5 trillion of liquidity
2️⃣ US bonds represent ≈70% of collateral
3️⃣ Lower bond prices means smaller loans, leading to a liquidity squeeze

Sustained high bond yields combined with QE will lead to an inflation of equity and risk asset…

hello@illya.sh (Illya Gerasymchuk) — Sun, 25 May 2025 20:34:03 +0000

Sustained high bond yields combined with QE will lead to an inflation of equity and risk asset prices

Here's how 👇

1️⃣ High yields = high required base return
2️⃣ Inflow of QE funds into equities & crypto
3️⃣ Equities & cryptocurrency prices increase

Further fuel for the bubble

All time high for gold incoming…

hello@illya.sh (Illya Gerasymchuk) — Mon, 26 May 2025 14:56:57 +0000

All time high for gold incoming…

Michael Saylor doesn't need to expose MSTR's wallets for a proof of reserves

hello@illya.sh (Illya Gerasymchuk) — Tue, 27 May 2025 13:55:06 +0000

Michael Saylor doesn't need to expose MSTR's wallets for a proof of reserves

All you need is Zero Knowledge Proof attesting that MicroStrategy has access to private key(s) holding a total of X BTC

With ZKPs - no Bitcoin addresses are exposed ✨

90% of all newly issued debt is for refinancing of existing debt, not new debt/financing

hello@illya.sh (Illya Gerasymchuk) — Tue, 27 May 2025 14:22:19 +0000

90% of all newly issued debt is for refinancing of existing debt, not new debt/financing

Thus, new debt is extremely inflationary & asset bubble-nurturing

The financial system is extremely leveraged at a high risk

We need to fix this. DeFi is the tool

🇺🇸 Cancelled tariffs means refunds, which means a larger budget deficit

hello@illya.sh (Illya Gerasymchuk) — Thu, 29 May 2025 01:38:33 +0000

🇺🇸 Cancelled tariffs means refunds, which means a larger budget deficit

Rising bond yields means that deficit is (even) more expensive to refinance

The FED will soon need inject liquidity via QE + lower interest rates

If USD/EUR falls below the pink trend line, it's a fall to ≈0.8785

hello@illya.sh (Illya Gerasymchuk) — Fri, 30 May 2025 17:11:43 +0000

If USD/EUR falls below the pink trend line, it's a fall to ≈0.8785

From here the downtrend towards ≈0.8689 (monthly level) is setup to be resumed & likely under a tighter channel (up: pink, bottom: green) - so a faster downfall of USD against EUR

Stay tuned 📻

🚀 .txt mirror for my X tweets/posts:

hello@illya.sh (Illya Gerasymchuk) — Sun, 01 Jun 2025 18:31:43 +0000

🚀 .txt mirror for my X tweets/posts:
https://illya.sh/thoughts/thoughts.txt

TL;DR:
👉 plaintext version of my thoughts/tweets
👉 accessible on every device - even smart watch & IoT
👉 LLM-friendly format
👉 UTF-8 encoded text with emojis

UI looks like this:

USD/EUR price action is developing exactly as described 😄

hello@illya.sh (Illya Gerasymchuk) — Mon, 02 Jun 2025 15:15:33 +0000

USD/EUR price action is developing exactly as described 😄

Once price went below the pink trend support line it fell through to 0.8785 exactly, before resuming a steeper downtrend after a failed breakout

📖 Quoted from 2025-05-30 18:11
https://illya.sh/thoughts/if-usd-eur-falls-below-the-pink-trend-line-its-a-fall-to-0
If USD/EUR falls below the pink trend line, it's a fall to ≈0.8785

From here the downtrend towards ≈0.8689 (monthly level) is setup to be resumed & likely under a tighter channel (up: pink, bottom: green) - so a faster downfall of USD against EUR

Stay tuned 📻

Observe

hello@illya.sh (Illya Gerasymchuk) — Fri, 06 Jun 2025 20:13:14 +0000

Observe

There you go 😄

hello@illya.sh (Illya Gerasymchuk) — Fri, 06 Jun 2025 20:54:35 +0000

There you go 😄

📖 Quoted from 2025-06-06 21:13
https://illya.sh/thoughts/observe
Observe

🤯👉 Quant trading secrets they don't want you to know

hello@illya.sh (Illya Gerasymchuk) — Tue, 10 Jun 2025 16:10:37 +0000

🤯👉 Quant trading secrets they don't want you to know

On the bright side - the Sharpe Ratio may soon underflow, thus turning it very positive

Still counts, right? 😂

The Ruble thesis remains valid

hello@illya.sh (Illya Gerasymchuk) — Tue, 10 Jun 2025 18:38:19 +0000

The Ruble thesis remains valid

Up ≈13% on the USD in the past quarter

📖 Quoted from 2025-04-14 10:21
https://illya.sh/thoughts/ruble-is-up-30-on-usd-2025-ytd
🚨 Ruble is up 30% on USD 2025 YTD

82-68 is a strong support - including pre-Ukraine war liquidity

A small pullback is very likely to happen, but in the medium-long term it's heading towards the 68

Once sanctions are dropped by US & EU - RUB will skyrocket

Risk-free rate returns with quant trading strategies may be fairly easy to achieve even with…

hello@illya.sh (Illya Gerasymchuk) — Wed, 11 Jun 2025 23:06:31 +0000

Risk-free rate returns with quant trading strategies may be fairly easy to achieve even with parameter-optimized Bollinger Bands

Not surprising, but unless the return can beat the mid/long-term bond yields - it's also not very useful 😄

Unless… leverage, of course

🚀 Are you ready?

hello@illya.sh (Illya Gerasymchuk) — Wed, 11 Jun 2025 23:24:21 +0000

🚀 Are you ready?

New all time high for gold is just around the corner

And there will already be a strong resistance in the ≈$3300 area, due to the recent accumulation

Low(er) interest rates + high(er) CPI will then push it up even further

While Gold & Oil are up, Ethereum and Bitcoin are down

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Jun 2025 00:52:51 +0000

While Gold & Oil are up, Ethereum and Bitcoin are down

As expected. A practical reminder that BTC, ETH & altcoins are NOT reserve assets

I am big believer in crypto & DeFi - but it's important to remain rational, even if you are entertained

As expected - 3 months was all that crude oil needed to spike back up

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Jun 2025 00:57:15 +0000

As expected - 3 months was all that crude oil needed to spike back up

Other commodities like gold, silver & others are up since as well

I hope you used the earlier advice to prepare for a new gold ATH

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Jun 2025 01:06:43 +0000

I hope you used the earlier advice to prepare for a new gold ATH

The turn around the corner has begun

📖 Quoted from 2025-06-12 00:24
https://illya.sh/thoughts/are-you-ready
🚀 Are you ready?

New all time high for gold is just around the corner

And there will already be a strong resistance in the ≈$3300 area, due to the recent accumulation

Low(er) interest rates + high(er) CPI will then push it up even further

🚀📈 NEW Gold ATH is in - $3440 per oz

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Jun 2025 13:38:28 +0000

🚀📈 NEW Gold ATH is in - $3440 per oz

I've been warning about this for a while

You had a little over a month since my original post to load up

📖 Quoted from 2025-04-25 11:00
https://illya.sh/thoughts/now-that-gold-is-down-below-3-3k-its-a-good-time-to-say-this
Now that gold is down & below $3.3K, it's a good time to say this:

🎉 New ATH coming very soon 🎉

In the time of political, civil & economic ambiguity - there is only one recourse - Au

Lower interest rates & QE are coming soon - FIAT down, gold up

💾 Save this & check back

🤯 Gold may just go straight to $3500 in the next few hours

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Jun 2025 15:29:35 +0000

🤯 Gold may just go straight to $3500 in the next few hours

Look at this 15-minute timeframe momentum ⬇️

Interestingly, the yields on US bonds are up across the yield curve - for both, short & long-term…

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Jun 2025 15:39:13 +0000

Interestingly, the yields on US bonds are up across the yield curve - for both, short & long-term maturities

The market - understandably - associated gold, rather than government debt with safety

Falling US Dollar index played out exactly as expected

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Jun 2025 15:44:45 +0000

Falling US Dollar index played out exactly as expected

2 months later and it's down another full point

📖 Quoted from 2025-04-19 12:47
https://illya.sh/thoughts/usd-index-bearish-in-a-downtrend
🇺🇸 USD index bearish/in a downtrend

5Y timeframe weekly chart shows lower highs & lows

Ever since Trump took office, every $DXY weekly candle has been red

Greatest USD economy in history 🫠

While Ethereum has built a strong-ish support in the current area, it currently looks more likely…

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Jun 2025 15:55:17 +0000

While Ethereum has built a strong-ish support in the current area, it currently looks more likely to fall towards the ≈$2180 monthly support

Do not underestimate what the new all time highs in gold are telling you

'The market is never wrong'

hello@illya.sh (Illya Gerasymchuk) — Mon, 16 Jun 2025 12:41:14 +0000

'The market is never wrong'

A lot of big accounts posting about how the market knows everything & prices accordingly - even before the official news

Okay.

Now wait & watch crude oil & gold raise up even more in price very soon

This isn't a joke

Shekel is headed down - to sub 4₪/€

hello@illya.sh (Illya Gerasymchuk) — Mon, 16 Jun 2025 12:47:19 +0000

Shekel is headed down - to sub 4₪/€

Inflation will be a huge problem soon as well

There's always gold 🤷‍♀️

💾⏰ Just like with my post about the price of gold a few months ago - feel free to save & set a…

hello@illya.sh (Illya Gerasymchuk) — Mon, 16 Jun 2025 12:49:56 +0000

💾⏰ Just like with my post about the price of gold a few months ago - feel free to save & set a reminder for this one

The prediction will be correct once again

📖 Quoted from 2025-06-16 13:41
https://illya.sh/thoughts/the-market-is-never-wrong
'The market is never wrong'

A lot of big accounts posting about how the market knows everything & prices accordingly - even before the official news

Okay.

Now wait & watch crude oil & gold raise up even more in price very soon

This isn't a joke

BTW I soon realized this wasn't an actual ATH for gold yet - but it is coming

hello@illya.sh (Illya Gerasymchuk) — Mon, 16 Jun 2025 15:33:24 +0000

BTW I soon realized this wasn't an actual ATH for gold yet - but it is coming

The historical chart is showing closing prices, not maximum

So I inadvertently compared current price with closing historical price

Good news - more time for you to accumulate gold before new ATH 😄

📖 Quoted from 2025-06-13 14:38
https://illya.sh/thoughts/new-gold-ath-is-in-3440-per-oz
🚀📈 NEW Gold ATH is in - $3440 per oz

I've been warning about this for a while

You had a little over a month since my original post to load up

aaand crude oil futures are back above $70

hello@illya.sh (Illya Gerasymchuk) — Mon, 16 Jun 2025 16:39:42 +0000

aaand crude oil futures are back above $70

📖 Quoted from 2025-06-16 13:41
https://illya.sh/thoughts/the-market-is-never-wrong
'The market is never wrong'

A lot of big accounts posting about how the market knows everything & prices accordingly - even before the official news

Okay.

Now wait & watch crude oil & gold raise up even more in price very soon

This isn't a joke

Contract-as-product approach

hello@illya.sh (Illya Gerasymchuk) — Mon, 16 Jun 2025 18:27:03 +0000

Contract-as-product approach

That's an interesting way to name it!

Oil & Gold back on the rise

hello@illya.sh (Illya Gerasymchuk) — Mon, 16 Jun 2025 22:52:57 +0000

Oil & Gold back on the rise

Just as I wrote earlier today

📖 Quoted from 2025-06-16 13:41
https://illya.sh/thoughts/the-market-is-never-wrong
'The market is never wrong'

A lot of big accounts posting about how the market knows everything & prices accordingly - even before the official news

Okay.

Now wait & watch crude oil & gold raise up even more in price very soon

This isn't a joke

🛢️ Crude oil back above $72 per barrel

hello@illya.sh (Illya Gerasymchuk) — Tue, 17 Jun 2025 16:20:44 +0000

🛢️ Crude oil back above $72 per barrel

Just as I wrote yesterday

📖 Quoted from 2025-06-16 23:52
https://illya.sh/thoughts/oil-gold-back-on-the-rise
Oil & Gold back on the rise

Just as I wrote earlier today

everybody has been so focused on oil price, that they largely ignored the decrease in US bond…

hello@illya.sh (Illya Gerasymchuk) — Wed, 18 Jun 2025 00:21:24 +0000

everybody has been so focused on oil price, that they largely ignored the decrease in US bond yields across the curve

this trend has been consistent throughout the month

interpretation 🧠:

short-term sign of run to safety, specially when combined with gold price

🎯 Ethereum fell below $2500

hello@illya.sh (Illya Gerasymchuk) — Wed, 18 Jun 2025 12:48:36 +0000

🎯 Ethereum fell below $2500

first part of my thesis has already played out - a retracement instead of a breakout

weekly candles show constant rejection

now await for what comes next ⏰

FYI the new BRICS banknote that has been circulating on social media today is NOT real

hello@illya.sh (Illya Gerasymchuk) — Wed, 18 Jun 2025 12:49:44 +0000

FYI the new BRICS banknote that has been circulating on social media today is NOT real

it's merely symbolic - NOT legal tender

before a joint currency, there will still be more bilateral trade in local currencies

unless those notes were to tokenize gold

watch. the. move. 🚀

hello@illya.sh (Illya Gerasymchuk) — Wed, 18 Jun 2025 12:51:05 +0000

watch. the. move. 🚀

🛢️crude oil back above $75

hello@illya.sh (Illya Gerasymchuk) — Thu, 19 Jun 2025 16:20:09 +0000

🛢️crude oil back above $75

just like I've been warning these past few days

🎯 Ethereum heading down towards $2180

hello@illya.sh (Illya Gerasymchuk) — Fri, 20 Jun 2025 18:23:21 +0000

🎯 Ethereum heading down towards $2180

exactly as I've been writing for several days

so many accounts with huge following were promising you an immediate bull run

now you know which ones you can mute 😄

📖 Quoted from 2025-06-18 13:48
https://illya.sh/thoughts/ethereum-fell-below-2500
🎯 Ethereum fell below $2500

first part of my thesis has already played out - a retracement instead of a breakout

weekly candles show constant rejection

now await for what comes next ⏰

always important to remember that gold isn't crypto and volatility is a lot more conservative…

hello@illya.sh (Illya Gerasymchuk) — Fri, 20 Jun 2025 18:29:44 +0000

always important to remember that gold isn't crypto and volatility is a lot more conservative there 😄

you're talking central banks balance sheet assets - not so much speculative, hedging or portfolio management

yet, $3500 gold is just around the corner

📖 Quoted from 2025-06-13 16:29
https://illya.sh/thoughts/gold-may-just-go-straight-to-3500-in-the-next-few-hours
🤯 Gold may just go straight to $3500 in the next few hours

Look at this 15-minute timeframe momentum ⬇️

💡FYI there is plain text version of my X posts:

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 15:28:41 +0000

💡FYI there is plain text version of my X posts:
https://illya.sh/thoughts/thoughts.txt

a .txt file which you can access on any device - including smart watch & IoT

no need for JavaScript, CSS or HTML rendering - saves electricity 😄🔋⚡️

text is an LLM-native format - so AI models can easily access, index & reason

this was fully vibe-coded

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 15:41:24 +0000

this was fully vibe-coded

i wanted to have a place to backup my X posts - own them under my own domain & be SEO/LLM discovery friendly by having all of content generated statically

it's written in Python & comes with Cursor rules so you can add features without writing code

📖 Quoted from 2025-06-21 16:28
https://illya.sh/thoughts/fyi-there-is-plain-text-version-of-my-x-posts
💡FYI there is plain text version of my X posts:
https://illya.sh/thoughts/thoughts.txt

a .txt file which you can access on any device - including smart watch & IoT

no need for JavaScript, CSS or HTML rendering - saves electricity 😄🔋⚡️

text is an LLM-native format - so AI models can easily access, index & reason

that's something that I intend to open-source, but the repo needs a bit of a cleanup

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 15:46:46 +0000

that's something that I intend to open-source, but the repo needs a bit of a cleanup

i've been using it on production, while actively adding new feature for a few months now

it's build so you can customize & evolve for your needs fully with AI

LLM-driven creativity era ✨

📖 Quoted from 2025-06-21 16:41
https://illya.sh/thoughts/this-was-fully-vibe-coded
this was fully vibe-coded

i wanted to have a place to backup my X posts - own them under my own domain & be SEO/LLM discovery friendly by having all of content generated statically

it's written in Python & comes with Cursor rules so you can add features without writing code

although google clearly isn't a fan of plain text 😭

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 15:56:47 +0000

although google clearly isn't a fan of plain text 😭

maybe it is:
- 0️⃣ performance
- 0️⃣ accessibility
- 0️⃣ best practices
- 0️⃣ SEO

but it still is:
- 💯 accessibility

i mean... you can access a text file from literally anywhere

+ your favorite LLM will thank you 🥰

📖 Quoted from 2025-06-21 16:28
https://illya.sh/thoughts/fyi-there-is-plain-text-version-of-my-x-posts
💡FYI there is plain text version of my X posts:
https://illya.sh/thoughts/thoughts.txt

a .txt file which you can access on any device - including smart watch & IoT

no need for JavaScript, CSS or HTML rendering - saves electricity 😄🔋⚡️

text is an LLM-native format - so AI models can easily access, index & reason

grok confirms what I said regarding .txt format ✅

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 16:13:35 +0000

grok confirms what I said regarding .txt format ✅

LLM AI models would LOVE if you website provided the key content in plain text

the good news is that you can vibe-code that feature

text is the universal medium of information, for both, humans and large language models

📖 Quoted from 2025-06-21 16:56
https://illya.sh/thoughts/although-google-clearly-isnt-a-fan-of-plain-text
although google clearly isn't a fan of plain text 😭

maybe it is:
- 0️⃣ performance
- 0️⃣ accessibility
- 0️⃣ best practices
- 0️⃣ SEO

but it still is:
- 💯 accessibility

i mean... you can access a text file from literally anywhere

+ your favorite LLM will thank you 🥰

ChatGPT reaffirms its preference for .txt over .html ✅

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 16:28:08 +0000

ChatGPT reaffirms its preference for .txt over .html ✅

if your webpage/landing page is loaded with pretty effects and CSS - remember that that is just a layer of obscurity for the LLM

host a plain text version as well - it's simple & effective

≈something akin to llms.txt

📖 Quoted from 2025-06-21 17:13
https://illya.sh/thoughts/grok-confirms-what-i-said-regarding-txt-format
grok confirms what I said regarding .txt format ✅

LLM AI models would LOVE if you website provided the key content in plain text

the good news is that you can vibe-code that feature

text is the universal medium of information, for both, humans and large language models

although gold already did a lot since this post - this is just the beginning ✨

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 16:51:10 +0000

although gold already did a lot since this post - this is just the beginning ✨

persistent high inflation is here to stay

FIAT currencies will continue to devalue, specially with the massive government debit refinancing & further interest rate cuts

📖 Quoted from 2025-05-26 15:56
https://illya.sh/thoughts/all-time-high-for-gold-incoming
All time high for gold incoming…

soooo… new gold ATH next week?

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 17:42:33 +0000

soooo… new gold ATH next week?

look at gold's price chart with weekly candles - it's unbelievable 🤯

gold is going up like a risky asset - but it in fact is a reflection of risk

now it looks like a breakout from another consolidation phase 📈

📖 Quoted from 2025-06-13 16:29
https://illya.sh/thoughts/gold-may-just-go-straight-to-3500-in-the-next-few-hours
🤯 Gold may just go straight to $3500 in the next few hours

Look at this 15-minute timeframe momentum ⬇️

hello hello looks like there wasn't much momentum behind ethereum's pullback

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 17:48:24 +0000

hello hello looks like there wasn't much momentum behind ethereum's pullback

the selling pressure is strong

price downside towards $2180 incoming

📖 Quoted from 2025-06-20 19:23
https://illya.sh/thoughts/ethereum-heading-down-towards-2180
🎯 Ethereum heading down towards $2180

exactly as I've been writing for several days

so many accounts with huge following were promising you an immediate bull run

now you know which ones you can mute 😄

both, gold & crude oil are finishing their consolidation before a further upside

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 17:52:15 +0000

both, gold & crude oil are finishing their consolidation before a further upside

bookmark this one for later 💾

📖 Quoted from 2025-06-16 13:41
https://illya.sh/thoughts/the-market-is-never-wrong
'The market is never wrong'

A lot of big accounts posting about how the market knows everything & prices accordingly - even before the official news

Okay.

Now wait & watch crude oil & gold raise up even more in price very soon

This isn't a joke

silver was another spot-on prediction ✅

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 21:14:40 +0000

silver was another spot-on prediction ✅

2.5 months later the price is up ≈25%

silver's price uptrend will continue

when silver's price increase is in the magnitude of risky assets - it's clearly telling you something

listen to it 🦻

📖 Quoted from 2025-04-04 20:54
https://illya.sh/thoughts/silver-back-to-august-2020-price
Silver back to August 2020 price

After a tariffs-induced pullback of 15% today, silver is now at start of COVID prices

So much inflation that still isn't priced in

It will recover. And a lot!

and a week later Ethereum indeed falls sharply towards the monthly support 😄

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 21:44:28 +0000

and a week later Ethereum indeed falls sharply towards the monthly support 😄

read up my other posts for more detail - if you're interested in the rationale behind this move

📖 Quoted from 2025-06-13 16:55
https://illya.sh/thoughts/while-ethereum-has-built-a-strong-ish-support-in-the-current
While Ethereum has built a strong-ish support in the current area, it currently looks more likely to fall towards the ≈$2180 monthly support

Do not underestimate what the new all time highs in gold are telling you

ethereum's price will very likely retrace upwards once it reaches the core monthly support area

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 21:56:25 +0000

ethereum's price will very likely retrace upwards once it reaches the core monthly support area

the buying pressure there would be immense

the same is true for bitcoin's support

📖 Quoted from 2025-06-21 22:44
https://illya.sh/thoughts/and-a-week-later-ethereum-indeed-falls-sharply-towards-the
and a week later Ethereum indeed falls sharply towards the monthly support 😄

read up my other posts for more detail - if you're interested in the rationale behind this move

ethereum's resumed downfall towards monthly ≈$2180 support may be resumed in the next hour

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 22:36:46 +0000

ethereum's resumed downfall towards monthly ≈$2180 support may be resumed in the next hour

this is a 5 minute-candle chart - but contextualize my argument within the greater trend

📖 Quoted from 2025-06-21 22:56
https://illya.sh/thoughts/ethereums-price-will-very-likely-retrace-upwards-once-it
ethereum's price will very likely retrace upwards once it reaches the core monthly support area

the buying pressure there would be immense

the same is true for bitcoin's support

look at that buy pressure exhaustion 😫

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 23:03:39 +0000

look at that buy pressure exhaustion 😫

ethereum's about to go back into red (or yellow, in my chart)

📖 Quoted from 2025-06-21 23:36
https://illya.sh/thoughts/ethereums-resumed-downfall-towards-monthly-2180-support-may
ethereum's resumed downfall towards monthly ≈$2180 support may be resumed in the next hour

this is a 5 minute-candle chart - but contextualize my argument within the greater trend

okay looks like it started before I could finish typing 😂

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 23:05:06 +0000

okay looks like it started before I could finish typing 😂

📖 Quoted from 2025-06-22 00:03
https://illya.sh/thoughts/look-at-that-buy-pressure-exhaustion
look at that buy pressure exhaustion 😫

ethereum's about to go back into red (or yellow, in my chart)

and ethereum's downtrend continues on…

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Jun 2025 23:20:41 +0000

and ethereum's downtrend continues on…

towards the monthly support area

📖 Quoted from 2025-06-22 00:05
https://illya.sh/thoughts/okay-looks-like-it-started-before-i-could-finish-typing
okay looks like it started before I could finish typing 😂

NotebookLM explains International Tax Law to a Software Engineer

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 08:07:43 +0000

NotebookLM explains International Tax Law to a Software Engineer

okay, from now on I'm referring to soft law as API spec 😂

although if you think about it - with AI/LLMs you can program APIs in natural languages (e.g. English)

brb dumping OECD MTC to Gemini for smart contracts

record $7 trillion USD in money market funds (mmf)

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 08:27:30 +0000

record $7 trillion USD in money market funds (mmf)

this risk-averse liquidity is bound to flow into into other financial assets at some point

mmf consists of short-term collateralized loans - credit that is NOT captured by M2

last two outflows coincided with bitcoin bullrun

money market funds yield close to the risk free rate (think of FED funds rate in the US, or ECB…

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 08:34:22 +0000

money market funds yield close to the risk free rate (think of FED funds rate in the US, or ECB deposit rate in the EU), while offering less risk due to shorter maturity

essentially, you provide a collateral (highly liquid - usually sovereign debt) and get a loan against it

📖 Quoted from 2025-06-22 09:27
https://illya.sh/thoughts/record-7-trillion-usd-in-money-market-funds-mmf
record $7 trillion USD in money market funds (mmf)

this risk-averse liquidity is bound to flow into into other financial assets at some point

mmf consists of short-term collateralized loans - credit that is NOT captured by M2

last two outflows coincided with bitcoin bullrun

all eyes on gold futures 👀

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 09:08:34 +0000

all eyes on gold futures 👀

COMEX gold futures trading open in 13h

markets are closed now, but blockchain never sleeps

on-chain gold-backed token futures may give you a heads-up - they're up ≈1.3% from yesterday

interesting to see gold moves after open

spoiler: higher price

📖 Quoted from 2025-06-21 18:42
https://illya.sh/thoughts/soooo-new-gold-ath-next-week
soooo… new gold ATH next week?

look at gold's price chart with weekly candles - it's unbelievable 🤯

gold is going up like a risky asset - but it in fact is a reflection of risk

now it looks like a breakout from another consolidation phase 📈

here's some ethereum alpha for the next hours ⬇️

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 09:45:46 +0000

here's some ethereum alpha for the next hours ⬇️

ETH is approaching a large liquidation area at ≈2240 USD

the closer we get to the price - the more long closures & liquidations

first price down due the selling pressure, then expect a rebound up & I already wrote what's next

📖 Quoted from 2025-06-13 16:55
https://illya.sh/thoughts/while-ethereum-has-built-a-strong-ish-support-in-the-current
While Ethereum has built a strong-ish support in the current area, it currently looks more likely to fall towards the ≈$2180 monthly support

Do not underestimate what the new all time highs in gold are telling you

i warned about ethereum's price fall towards the monthly support over a week ago - back when…

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 10:13:38 +0000

i warned about ethereum's price fall towards the monthly support over a week ago - back when everyone was still bullish

now, another large liquidation price zone is approaching ≈$2240

what do you think will be the price action after monthly level rebound? trend up or down?

📖 Quoted from 2025-06-13 16:55
https://illya.sh/thoughts/while-ethereum-has-built-a-strong-ish-support-in-the-current
While Ethereum has built a strong-ish support in the current area, it currently looks more likely to fall towards the ≈$2180 monthly support

Do not underestimate what the new all time highs in gold are telling you

i warned about ethereum's price downfall towards the monthly support over a week ago - back when…

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 10:16:42 +0000

i warned about ethereum's price downfall towards the monthly support over a week ago - back when everyone was still bullish

now, another large liquidation price zone is approaching ≈$2240

what do you think will be the price action after monthly level rebound? trend up or down?

gold's behavior during the current 'bullrun' has been consistently to flip previous week's…

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 11:08:05 +0000

gold's behavior during the current 'bullrun' has been consistently to flip previous week's resistance to new support

in the chart - the green vertical lines are weekly levels

gold's current price action suggests it's flipping another resistance for support

Road to $3500 🚀

📖 Quoted from 2025-06-22 10:08
https://illya.sh/thoughts/all-eyes-on-gold-futures
all eyes on gold futures 👀

COMEX gold futures trading open in 13h

markets are closed now, but blockchain never sleeps

on-chain gold-backed token futures may give you a heads-up - they're up ≈1.3% from yesterday

interesting to see gold moves after open

spoiler: higher price

btw here I'm looking at PAXG (Paxos Gold) token

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 11:10:58 +0000

btw here I'm looking at PAXG (Paxos Gold) token

essentially, a 1:1 gold-backed ERC-20 token

there is also XAUT from Tether

whenever TradFi markets are closed - it's your go-to for alpha insights

can't believe that in 2025 there is still such a thing as market closure 🤯

📖 Quoted from 2025-06-22 12:08
https://illya.sh/thoughts/golds-behavior-during-the-current-bullrun-has-been
gold's behavior during the current 'bullrun' has been consistently to flip previous week's resistance to new support

in the chart - the green vertical lines are weekly levels

gold's current price action suggests it's flipping another resistance for support

Road to $3500 🚀

UN's Model Double Taxation Convention has a clear key benefit over OCED's

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 13:20:50 +0000

UN's Model Double Taxation Convention has a clear key benefit over OCED's

since UN's model gives more taxing rights for the source state - it's the one that makes sense for developing economies

imagine a developed nation benefiting from cheaper labor in the source state - who created the workforce in the first place, and having their tax base eroded in favor of resident state

so the resident state would get double benefit:

1️⃣ cheaper labor
2️⃣ higher tax income for the government

on the other hand you could argue for OCED's model favoring a higher volume of investment, thus effectively distributing more wages throughout the economy. this channels the funds more directly to the consumers, which would end up increasing their purchasing power more than if it had to go through the government first

but then again, you must remember the global market is NOT a free market economy. existing legislation overall favors more developed countries, so protective measures for developing countries in the international tax law may make a lot of sense

now it's official 😄

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 13:34:49 +0000

now it's official 😄

ethereum price fell to $2180 📉

interestingly, the majority sentiment of large following X accounts seemed to be bullish

please note, I wrote the original post more than a week ago - back then the market sentiment was extremely bullish

📖 Quoted from 2025-06-13 16:55
https://illya.sh/thoughts/while-ethereum-has-built-a-strong-ish-support-in-the-current
While Ethereum has built a strong-ish support in the current area, it currently looks more likely to fall towards the ≈$2180 monthly support

Do not underestimate what the new all time highs in gold are telling you

gold futures market opens in 2 mins!!

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 21:58:36 +0000

gold futures market opens in 2 mins!!

are you ready?

📖 Quoted from 2025-06-21 18:42
https://illya.sh/thoughts/soooo-new-gold-ath-next-week
soooo… new gold ATH next week?

look at gold's price chart with weekly candles - it's unbelievable 🤯

gold is going up like a risky asset - but it in fact is a reflection of risk

now it looks like a breakout from another consolidation phase 📈

and this is how the gold market opened

hello@illya.sh (Illya Gerasymchuk) — Sun, 22 Jun 2025 22:07:18 +0000

and this is how the gold market opened

green candle straight to $3400 🚀

📖 Quoted from 2025-06-22 22:58
https://illya.sh/thoughts/gold-futures-market-opens-in-2-mins
gold futures market opens in 2 mins!!

are you ready?

initial raise, now followed by a pullback

hello@illya.sh (Illya Gerasymchuk) — Wed, 25 Jun 2025 12:15:55 +0000

initial raise, now followed by a pullback

large geopolitical events do such moves, however don't you for a minute think that the thesis is now invalidated 😄

both of these commodities will continue their uptrend

📖 Quoted from 2025-06-16 13:41
https://illya.sh/thoughts/the-market-is-never-wrong
'The market is never wrong'

A lot of big accounts posting about how the market knows everything & prices accordingly - even before the official news

Okay.

Now wait & watch crude oil & gold raise up even more in price very soon

This isn't a joke

reverse repurchase agreement is just the other side (seller) side of a repurchase agreement (buyer)

hello@illya.sh (Illya Gerasymchuk) — Wed, 25 Jun 2025 13:28:32 +0000

reverse repurchase agreement is just the other side (seller) side of a repurchase agreement (buyer)

repurchaser provides collateral and receives a loan

reverse repurchaser receives the collateral and issues a loan

at maturity the repurchaser repurchases the collateral

🚀 added a share action to every post

hello@illya.sh (Illya Gerasymchuk) — Wed, 25 Jun 2025 17:44:27 +0000

🚀 added a share action to every post

so now you can press to open the share dialog

it only shares the url, but the preview image of the URL contains the post/thought text

definitely plan to open-source this at some point (the repo just needs some cleanup)

example in reply ⬇️

USD decline prediction was spot-on ✅

hello@illya.sh (Illya Gerasymchuk) — Thu, 26 Jun 2025 13:25:34 +0000

USD decline prediction was spot-on ✅

2 months later and US dollar index just bounced off from 97

the past 6 months have been a downtrend for $DXY

📖 Quoted from 2025-04-17 15:22
https://illya.sh/thoughts/us-dollar-index-going-to-98-3
🚨US Dollar Index going to ≈98.3

Current price is a strong monthly level

The next destination is low 98's

central banks will continue to buy gold

hello@illya.sh (Illya Gerasymchuk) — Thu, 26 Jun 2025 14:52:42 +0000

central banks will continue to buy gold

you'll be able to confirm that in their upcoming balance sheets reports. pay special attention to China & Russia

enjoy the dip, because smart money is!

expected? yes ✅

hello@illya.sh (Illya Gerasymchuk) — Thu, 26 Jun 2025 16:32:13 +0000

expected? yes ✅
normal? no ❌

gold shouldn't be up 50% in a year
and you shouldn't ignore what that means

i wrote this back in 2013. as the current highs are consolidated - it will move up further

maybe when you're reading this the above has already played out 😄

📖 Quoted from 2023-12-11 23:23
https://illya.sh/thoughts/if-you-only-understood-how-cheap-gold-is-now-to-put-it-in
If you only understood how cheap gold is now. To put it in perspective, its current FIAT price only reflects inflation prior to 2011 🤯

Any direct or indirect inflation following that time period has not yet been accounted for

You don't have to trust me. Trust the price action

beware that a lot of accounts with massive leverage trades are paid advertisements

hello@illya.sh (Illya Gerasymchuk) — Thu, 26 Jun 2025 16:35:51 +0000

beware that a lot of accounts with massive leverage trades are paid advertisements

wether it's by the exchange or larger parts of the industry. don't forget that smart money needs a counterparty 😉

a lot of them, specially the larger are definitely hedging behind the scenes

central bank balance sheets are an underrated resource for understanding the global liquidity moves

hello@illya.sh (Illya Gerasymchuk) — Thu, 26 Jun 2025 18:55:40 +0000

central bank balance sheets are an underrated resource for understanding the global liquidity moves

if you're following my posts - you already know that

rising US bond yields, ruble & gold

falling USD

i've been warning about it for months

90's style data = massive alpha 😂⬇️

📖 Quoted from 2025-06-26 15:52
https://illya.sh/thoughts/central-banks-will-continue-to-buy-gold
central banks will continue to buy gold

you'll be able to confirm that in their upcoming balance sheets reports. pay special attention to China & Russia

enjoy the dip, because smart money is!

🚀 added stateless comments on posts

hello@illya.sh (Illya Gerasymchuk) — Sat, 28 Jun 2025 08:51:44 +0000

🚀 added stateless comments on posts

i wanted to add comments to my statically-generated thoughts site, but didn't want to depend on storage or server-side logic

solution: send comments via e-mail, X/twitter or telegram

demo in reply ⬇️

💬 each comment is automatically saved

hello@illya.sh (Illya Gerasymchuk) — Sun, 29 Jun 2025 10:01:24 +0000

💬 each comment is automatically saved

with a 7-day expiration - all locally in user storage

so essentially an automatic draft

try it yourself: go to one of my posts/thoughts, press/click comment emoji, write the comment, close the tab. the comment will be there on re-open

📖 Quoted from 2025-06-28 09:51
https://illya.sh/thoughts/added-stateless-comments-on-posts
🚀 added stateless comments on posts

i wanted to add comments to my statically-generated thoughts site, but didn't want to depend on storage or server-side logic

solution: send comments via e-mail, X/twitter or telegram

demo in reply ⬇️

💧FED swap lines = infinite liquidity pool

hello@illya.sh (Illya Gerasymchuk) — Sun, 29 Jun 2025 12:43:32 +0000

💧FED swap lines = infinite liquidity pool

👉 here's how:

1️⃣ central banks exchange their foreign currency for USD, 7-80 days later, they reverse the exchange at the same rate + fee

2️⃣ central banks then lend these new USD to commercial banks

thus, USD demand is met

FED swap line operations reach ≈$600 bn

hello@illya.sh (Illya Gerasymchuk) — Sun, 29 Jun 2025 12:54:31 +0000

FED swap line operations reach ≈$600 bn

while the swaps are closed/repaid in less than a year, ≈80% of the repayment comes from newly issued wholesale debt

thus, ≈80% of the swap volume eventually becomes new currency in circulation

and then you wonder about inflation 😄

📖 Quoted from 2025-06-29 13:43
https://illya.sh/thoughts/fed-swap-lines-infinite-liquidity-pool
💧FED swap lines = infinite liquidity pool

👉 here's how:

1️⃣ central banks exchange their foreign currency for USD, 7-80 days later, they reverse the exchange at the same rate + fee

2️⃣ central banks then lend these new USD to commercial banks

thus, USD demand is met

new currency in circulation is just one of the side-effects

hello@illya.sh (Illya Gerasymchuk) — Sun, 29 Jun 2025 12:57:38 +0000

new currency in circulation is just one of the side-effects

and that transition is neither direct, nor instant

before these funds effectively become new currency, they flow into financial markets - that's why you see the stock market going up first

the same for risky assets

📖 Quoted from 2025-06-29 13:54
https://illya.sh/thoughts/fed-swap-line-operations-reach-600-bn
FED swap line operations reach ≈$600 bn

while the swaps are closed/repaid in less than a year, ≈80% of the repayment comes from newly issued wholesale debt

thus, ≈80% of the swap volume eventually becomes new currency in circulation

and then you wonder about inflation 😄

check the correlation between FED swap line volumes and Bitcoin price

hello@illya.sh (Illya Gerasymchuk) — Sun, 29 Jun 2025 13:05:59 +0000

check the correlation between FED swap line volumes and Bitcoin price

large spikes in swap volume trigger an uptrend in Bitcoin

understanding these global liquidity flows helps to visualize them as a part of the larger system and understand where it's likely to move next

📖 Quoted from 2025-06-29 13:57
https://illya.sh/thoughts/new-currency-in-circulation-is-just-one-of-the-side-effects
new currency in circulation is just one of the side-effects

and that transition is neither direct, nor instant

before these funds effectively become new currency, they flow into financial markets - that's why you see the stock market going up first

the same for risky assets

pre-market tesla is already down to a weekly support back from July 2023

hello@illya.sh (Illya Gerasymchuk) — Tue, 01 Jul 2025 13:36:13 +0000

pre-market tesla is already down to a weekly support back from July 2023

the narrative that equities price is mainly linked with EBIDTA or other revenue/profit metrics is false

it's all about where the credit flows

volatility is at best - a part of a the risk

hello@illya.sh (Illya Gerasymchuk) — Wed, 02 Jul 2025 17:14:24 +0000

volatility is at best - a part of a the risk

an increase in volatility doesn't necessarily mean an increase in risk

e.g.:
shortages in global liquidity put mismatched liabilities at a loss. safe assets raise in price

the high risk already existed while there was low volatility

🚨🏦 claims that gold is a Tier 1 asset under Basel III are FALSE:

hello@illya.sh (Illya Gerasymchuk) — Wed, 02 Jul 2025 19:43:27 +0000

🚨🏦 claims that gold is a Tier 1 asset under Basel III are FALSE:

1. gold is NOT a Tier capital under Basel - it's on the liability, not asset side

2. gold had 0% risk weight since Basel I (no haircut)

3. gold is still NOT considered a high quality liquid asset (HQLA)

🏦 under Basel III gold is subject additional funding requirements

hello@illya.sh (Illya Gerasymchuk) — Wed, 02 Jul 2025 19:53:31 +0000

🏦 under Basel III gold is subject additional funding requirements

there's a 85% required stable funding (RSF) factor on gold under net stable funding ratio (NSFR)

so for every $1B of gold that a bank holds - $850M must be funded with longer term retail or wholesale funding

📖 Quoted from 2025-07-02 20:43
https://illya.sh/thoughts/claims-that-gold-is-a-tier-1-asset-under-basel-iii-are-false
🚨🏦 claims that gold is a Tier 1 asset under Basel III are FALSE:

1. gold is NOT a Tier capital under Basel - it's on the liability, not asset side

2. gold had 0% risk weight since Basel I (no haircut)

3. gold is still NOT considered a high quality liquid asset (HQLA)

Basel framework treats "capital" as a funding source that can absorb losses, rather than an owned…

hello@illya.sh (Illya Gerasymchuk) — Wed, 02 Jul 2025 20:13:02 +0000

Basel framework treats "capital" as a funding source that can absorb losses, rather than an owned asset

assets are funded by liabilities and equity, so assets are not a funding source

Tier 1 capital is the first-line of losses absorption for a bank

so gold can't be in "Tier"

📖 Quoted from 2025-07-02 20:43
https://illya.sh/thoughts/claims-that-gold-is-a-tier-1-asset-under-basel-iii-are-false
🚨🏦 claims that gold is a Tier 1 asset under Basel III are FALSE:

1. gold is NOT a Tier capital under Basel - it's on the liability, not asset side

2. gold had 0% risk weight since Basel I (no haircut)

3. gold is still NOT considered a high quality liquid asset (HQLA)

repurchase agreements are almost always over-collateralized

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:44:05 +0000

repurchase agreements are almost always over-collateralized

the borrower undervalues the collateral by a percentage (haircut) - this is a buffer against price volatility

the purchase and repurchase price are computed over the post-haircut value

so if you have a UST bond worth $100:

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:44:29 +0000

so if you have a UST bond worth $100:

lender applies a haircut (e.g. 2%) - 100*(1-0.02)=$98
lender sets a repurchase price (e.g. $98.013)

so you use your $100 bond to get a $98 loan, for which you must repay with a fee (interest) $98.013

📖 Quoted from 2025-07-03 17:44
https://illya.sh/thoughts/repurchase-agreements-are-almost-always-over-collateralized
repurchase agreements are almost always over-collateralized

the borrower undervalues the collateral by a percentage (haircut) - this is a buffer against price volatility

the purchase and repurchase price are computed over the post-haircut value

in the end, you get your UST bond back

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:44:53 +0000

in the end, you get your UST bond back

and it makes sense for you to repurchase the bond (collateral) even if the price falls

as long as the price fall is < ≈haircut (2% in our case)

📖 Quoted from 2025-07-03 17:44
https://illya.sh/thoughts/so-if-you-have-a-ust-bond-worth-100
so if you have a UST bond worth $100:

lender applies a haircut (e.g. 2%) - 100*(1-0.02)=$98
lender sets a repurchase price (e.g. $98.013)

so you use your $100 bond to get a $98 loan, for which you must repay with a fee (interest) $98.013

repo markets are HUGE - about the size of USD M2!

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:46:48 +0000

repo markets are HUGE - about the size of USD M2!

they underpin the global financial system

however, there's not many DeFi protocols addressing this part of the market

i may pick it up in the near future

if you're working on something similar - hit me up!

📖 Quoted from 2025-07-03 17:44
https://illya.sh/thoughts/in-the-end-you-get-your-ust-bond-back
in the end, you get your UST bond back

and it makes sense for you to repurchase the bond (collateral) even if the price falls

as long as the price fall is < ≈haircut (2% in our case)

overall blockchain DeFi lacks development for short-term lending markets

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:48:28 +0000

overall blockchain DeFi lacks development for short-term lending markets

short-term market volumes are larger than M2 & Co.

yes, you can lend on AAVE, but rates vary greatly

📖 Quoted from 2025-07-03 17:46
https://illya.sh/thoughts/repo-markets-are-huge-about-the-size-of-usd-m2
repo markets are HUGE - about the size of USD M2!

they underpin the global financial system

however, there's not many DeFi protocols addressing this part of the market

i may pick it up in the near future

if you're working on something similar - hit me up!

remember those HUGE repo markets that I talked about?

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:49:16 +0000

remember those HUGE repo markets that I talked about?

US bonds/treasuries are the favorite collateral for those transactions

and that's why they're not going away anytime soon

but of course, the financial system is slowly diversifying

📖 Quoted from 2025-07-03 17:46
https://illya.sh/thoughts/repo-markets-are-huge-about-the-size-of-usd-m2
repo markets are HUGE - about the size of USD M2!

they underpin the global financial system

however, there's not many DeFi protocols addressing this part of the market

i may pick it up in the near future

if you're working on something similar - hit me up!

most of debt is issued for re-financing of existing debt, not for new debt

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:49:58 +0000

most of debt is issued for re-financing of existing debt, not for new debt

repo markets are the backbone of that. and since they're collateralized loans - there is a huge demand for collateral/safe assets

📖 Quoted from 2025-05-27 15:22
https://illya.sh/thoughts/90-of-all-newly-issued-debt-is-for-refinancing-of-existing
90% of all newly issued debt is for refinancing of existing debt, not new debt/financing

Thus, new debt is extremely inflationary & asset bubble-nurturing

The financial system is extremely leveraged at a high risk

We need to fix this. DeFi is the tool

now you might think that gold would be a perfect collateral for repos, but currently:

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:50:36 +0000

now you might think that gold would be a perfect collateral for repos, but currently:

it's too volatile - price may drop > 10% on systemic risks

there is no lender of last resort (you can't print gold or have swap lines for it 😀)

📖 Quoted from 2025-07-03 17:49
https://illya.sh/thoughts/most-of-debt-is-issued-for-re-financing-of-existing-debt-not
most of debt is issued for re-financing of existing debt, not for new debt

repo markets are the backbone of that. and since they're collateralized loans - there is a huge demand for collateral/safe assets

transition into multipolarity brings risks & volatility into financial markets

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:51:02 +0000

transition into multipolarity brings risks & volatility into financial markets

some FX currencies & bonds go up - others down

the demand for safe assets is not going away anywhere

the debt still needs to be refinanced 🤷‍♀️

📖 Quoted from 2025-07-03 17:50
https://illya.sh/thoughts/now-you-might-think-that-gold-would-be-a-perfect-collateral
now you might think that gold would be a perfect collateral for repos, but currently:

it's too volatile - price may drop > 10% on systemic risks

there is no lender of last resort (you can't print gold or have swap lines for it 😀)

(re)monetization of gold is already in progress

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:51:53 +0000

(re)monetization of gold is already in progress

central banks have been consistently buying gold for many years

this is especially true for Russia & China

📖 Quoted from 2025-03-21 12:45
https://illya.sh/thoughts/over-10-years-the-russian-central-bank-has-increased-gold
Over 10 years the Russian Central Bank has increased gold holdings by x4.5

🇷🇺 Gold is now 35% of all international reserves held by Russia 🤯

🇺🇸 Comparatively, for USA the number is 5%

This is why Russia and Ruble have been so resilient to sanctions

as more markets develop over gold - so will its usage as collateral in short-term/repo credit…

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:52:18 +0000

as more markets develop over gold - so will its usage as collateral in short-term/repo credit markets

it will likely become a more frequent choice for collateral/hedge during the multipolar transition. specially if bond yields continue to exhibit increased volatility

📖 Quoted from 2025-07-03 17:51
https://illya.sh/thoughts/re-monetization-of-gold-is-already-in-progress
(re)monetization of gold is already in progress

central banks have been consistently buying gold for many years

this is especially true for Russia & China

gold did exactly this during the 2008 GFC

hello@illya.sh (Illya Gerasymchuk) — Thu, 03 Jul 2025 16:53:21 +0000

gold did exactly this during the 2008 GFC

its share in collateral usage in global repo markets increased

and in 2025 we're seeing the same trend, with gold share in repo market collateral increasing

📖 Quoted from 2025-07-03 17:52
https://illya.sh/thoughts/as-more-markets-develop-over-gold-so-will-its-usage-as
as more markets develop over gold - so will its usage as collateral in short-term/repo credit markets

it will likely become a more frequent choice for collateral/hedge during the multipolar transition. specially if bond yields continue to exhibit increased volatility

🚀📡 added an RSS feed to my thoughts

hello@illya.sh (Illya Gerasymchuk) — Fri, 04 Jul 2025 21:40:25 +0000

🚀📡 added an RSS feed to my thoughts

so now you can follow the RSS feed, instead of reading the content from X or HTML webpage. any RSS reader should work

implemented statically generated RSS feed of all the content posted under the microblogging platform

📡 so if you open the though's feed in an RSS reader you can see all the posts

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 00:56:56 +0000

📡 so if you open the though's feed in an RSS reader you can see all the posts

without a need for centralized services. the RSS can be served via various mediums

everything is static so very SEO/LLM friendly

+ as a bonus you'll probably have integrated search as well 😄

📖 Quoted from 2025-07-04 22:40
https://illya.sh/thoughts/added-an-rss-feed-to-my-thoughts
🚀📡 added an RSS feed to my thoughts

so now you can follow the RSS feed, instead of reading the content from X or HTML webpage. any RSS reader should work

implemented statically generated RSS feed of all the content posted under the microblogging platform

📡🌇 images are also included in the RSS feed

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 13:29:05 +0000

📡🌇 images are also included in the RSS feed

so if a thought/post has an attached image - it will also be displayed in the RSS entry

the image is included in 2 different ways - so should be compatible with your favorite RSS reader

here's how it looks like ⬇️

📖 Quoted from 2025-07-05 01:56
https://illya.sh/thoughts/so-if-you-open-the-thoughs-feed-in-an-rss-reader-you-can-see
📡 so if you open the though's feed in an RSS reader you can see all the posts

without a need for centralized services. the RSS can be served via various mediums

everything is static so very SEO/LLM friendly

+ as a bonus you'll probably have integrated search as well 😄

📡 quoted thoughts are neatly rendered

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 13:44:14 +0000

📡 quoted thoughts are neatly rendered

visually it's like the quote block that you find in e-mail

🏞️ quoted post images are also rendered

and you can click on the hyperlink which will take you directly to the quoted thought

RSS is indeed a useful standard 😄

📖 Quoted from 2025-07-05 14:29
https://illya.sh/thoughts/images-are-also-included-in-the-rss-feed
📡🌇 images are also included in the RSS feed

so if a thought/post has an attached image - it will also be displayed in the RSS entry

the image is included in 2 different ways - so should be compatible with your favorite RSS reader

here's how it looks like ⬇️

US Treasuries are by far the most popular collateral type in secured short-term funding markets…

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 14:40:31 +0000

US Treasuries are by far the most popular collateral type in secured short-term funding markets (e.g. the repo market)

outstanding volume of these markets is larger than M2

notice the increase in usage of less safe assets as a collateral

not enough UST for its demand ⬇️

the higher use of lower quality collateral has pro-cyclical effects

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 14:51:39 +0000

the higher use of lower quality collateral has pro-cyclical effects

if the price of collateral falls during economic downturn - you'll get a lot of margin calls & insolvencies. this will further put pressure on short-term funding mechanisms, which already lack HQ collateral

📖 Quoted from 2025-07-05 15:40
https://illya.sh/thoughts/us-treasuries-are-by-far-the-most-popular-collateral-type-in
US Treasuries are by far the most popular collateral type in secured short-term funding markets (e.g. the repo market)

outstanding volume of these markets is larger than M2

notice the increase in usage of less safe assets as a collateral

not enough UST for its demand ⬇️

the 14 year old dormant bitcoin wallet transactions are likely OTC operations

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 15:34:09 +0000

the 14 year old dormant bitcoin wallet transactions are likely OTC operations

if you want to buy/sell >$1B worth of bitcoin, you're not going to do it through coinbase 😄

i've encountered numerous alternative explanations - some very creative

🪒 remember: occam's razor

liquidity abundance leads to the narrowing of spread between riskier and safe assets (mostly…

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 17:06:02 +0000

liquidity abundance leads to the narrowing of spread between riskier and safe assets (mostly government bonds)

safe assets fall in price, with their yields increasing towards the riskier ones

US bond yields are high under tighter monetary conditions - liquidity is pro cyclical

📖 Quoted from 2025-07-05 15:51
https://illya.sh/thoughts/the-higher-use-of-lower-quality-collateral-has-pro-cyclical
the higher use of lower quality collateral has pro-cyclical effects

if the price of collateral falls during economic downturn - you'll get a lot of margin calls & insolvencies. this will further put pressure on short-term funding mechanisms, which already lack HQ collateral

once FED lowers interest rates, it's likely to put downward pressure on yields - assuming term…

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 17:12:38 +0000

once FED lowers interest rates, it's likely to put downward pressure on yields - assuming term premia doesn't increase by more

in the end, the yields will be higher than in the last 20 years, for the same FED funds rate

QE/liquidity injections will further devalue USD

📖 Quoted from 2025-07-05 18:06
https://illya.sh/thoughts/liquidity-abundance-leads-to-the-narrowing-of-spread-between
liquidity abundance leads to the narrowing of spread between riskier and safe assets (mostly government bonds)

safe assets fall in price, with their yields increasing towards the riskier ones

US bond yields are high under tighter monetary conditions - liquidity is pro cyclical

this new liquidity will reach financial markets first, before reaching the "real economy"

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 17:19:38 +0000

this new liquidity will reach financial markets first, before reaching the "real economy"

equity, cryptocurrencies all go up in prices. bubble further fueled. you know what (eventually) happens to all bubbles

Gold & Co. is a great hedge

📖 Quoted from 2025-07-05 18:12
https://illya.sh/thoughts/once-fed-lowers-interest-rates-its-likely-to-put-downward
once FED lowers interest rates, it's likely to put downward pressure on yields - assuming term premia doesn't increase by more

in the end, the yields will be higher than in the last 20 years, for the same FED funds rate

QE/liquidity injections will further devalue USD

this is the general model, and think of these events as adding pressure towards the described…

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 17:22:53 +0000

this is the general model, and think of these events as adding pressure towards the described outcome, rather than an axiom

there are other events than can steer the pressure towards a different outcome, and the final outcome is a combination of all 😄

📖 Quoted from 2025-07-05 18:19
https://illya.sh/thoughts/this-new-liquidity-will-reach-financial-markets-first-before
this new liquidity will reach financial markets first, before reaching the "real economy"

equity, cryptocurrencies all go up in prices. bubble further fueled. you know what (eventually) happens to all bubbles

Gold & Co. is a great hedge

using historical behavior can be a great alpha - but you should probably focus on the patterns…

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 17:27:50 +0000

using historical behavior can be a great alpha - but you should probably focus on the patterns from this century

perpetually low ≈0% interest rates have been a norm only post ≈2009 (but the bubble started before)

so you want to look at the behavior in that environment

📖 Quoted from 2025-07-05 18:22
https://illya.sh/thoughts/this-is-the-general-model-and-think-of-these-events-as
this is the general model, and think of these events as adding pressure towards the described outcome, rather than an axiom

there are other events than can steer the pressure towards a different outcome, and the final outcome is a combination of all 😄

ex: in the 1980's US fought high inflation by raising interest rates towards ≈20%

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 17:32:11 +0000

ex: in the 1980's US fought high inflation by raising interest rates towards ≈20%

if the FED did that today - the global financial markets, alongside the US would be destroyed. there wouldn't be enough liquidity to refinance the debt

📖 Quoted from 2025-07-05 18:27
https://illya.sh/thoughts/using-historical-behavior-can-be-a-great-alpha-but-you
using historical behavior can be a great alpha - but you should probably focus on the patterns from this century

perpetually low ≈0% interest rates have been a norm only post ≈2009 (but the bubble started before)

so you want to look at the behavior in that environment

so today it may not be wise to assume that the FED will hike interest rates into double digits to…

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 17:35:11 +0000

so today it may not be wise to assume that the FED will hike interest rates into double digits to lower the CPI/inflation

rather - the interest rates are headed down, bc of challenge in refinancing debt

that's what I meant by focusing on historical patterns from this century

📖 Quoted from 2025-07-05 18:32
https://illya.sh/thoughts/ex-in-the-1980s-us-fought-high-inflation-by-raising-interest
ex: in the 1980's US fought high inflation by raising interest rates towards ≈20%

if the FED did that today - the global financial markets, alongside the US would be destroyed. there wouldn't be enough liquidity to refinance the debt

all of this very bullish for gold & other commodities

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 18:06:15 +0000

all of this very bullish for gold & other commodities

it's not just gold & silver - you may have seen the recent appreciation of platinum

those commodities have still have price to catch up on & that has been signaled by their volatility

gold up 40% on the year isn't normal

📖 Quoted from 2025-07-05 18:35
https://illya.sh/thoughts/so-today-it-may-not-be-wise-to-assume-that-the-fed-will-hike
so today it may not be wise to assume that the FED will hike interest rates into double digits to lower the CPI/inflation

rather - the interest rates are headed down, bc of challenge in refinancing debt

that's what I meant by focusing on historical patterns from this century

$29,000 per lb of orange juice.

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 18:43:24 +0000

$29,000 per lb of orange juice.

You're early.

🍊😄

btw I'm not saying Ethereum won't reach 1 million USD per ETH, but rather pointing out that…

hello@illya.sh (Illya Gerasymchuk) — Sat, 05 Jul 2025 18:49:26 +0000

btw I'm not saying Ethereum won't reach 1 million USD per ETH, but rather pointing out that comparing Ethereum to the bond market and oil is a stretch

it's also more accurate to account for the whole crypto cap in this context

📖 Quoted from 2025-07-05 19:43
https://illya.sh/thoughts/29-000-per-lb-of-orange-juice
$29,000 per lb of orange juice.

You're early.

🍊😄

🚨FED just injected $11B of liquidity

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 16:49:19 +0000

🚨FED just injected $11B of liquidity

👉 TL;DR: interest rate cuts & QE incoming

$11B is insignificant - but it's an early sign: there is a lack of liquidity/cash

if undressed, will lead to systemic defaults. existing debt needs to be refinanced

the fix/what's next? see TL;DR

SRF provides daily $500B liquidity limit for overnight repo operations

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 16:54:03 +0000

SRF provides daily $500B liquidity limit for overnight repo operations

a rate is published daily & dealers lend borrow against US bonds

dealers/market makers use SRF when the rate in the open repo market gets too high

SRF = Standing Repo Facility

📖 Quoted from 2025-07-07 17:49
https://illya.sh/thoughts/fed-just-injected-11b-of-liquidity
🚨FED just injected $11B of liquidity

👉 TL;DR: interest rate cuts & QE incoming

$11B is insignificant - but it's an early sign: there is a lack of liquidity/cash

if undressed, will lead to systemic defaults. existing debt needs to be refinanced

the fix/what's next? see TL;DR

with SRF the FED sets an upper limit on repo market rates

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 16:56:00 +0000

with SRF the FED sets an upper limit on repo market rates

most of the collateral is US Treasury bonds

this exerts downward pressure on bond yields - by preventing sell-offs

📖 Quoted from 2025-07-07 17:54
https://illya.sh/thoughts/srf-provides-daily-500b-liquidity-limit-for-overnight-repo
SRF provides daily $500B liquidity limit for overnight repo operations

a rate is published daily & dealers lend borrow against US bonds

dealers/market makers use SRF when the rate in the open repo market gets too high

SRF = Standing Repo Facility

in practice, FED's SRF is used when there is a scarcity of liquidity/cash

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:01:44 +0000

in practice, FED's SRF is used when there is a scarcity of liquidity/cash

the market has US bonds & needs cash, so lenders increase rates

SRF sets a daily rate. if that rate is smaller than in the smaller repo market - the dealers instead borrow USD directly from the FED

📖 Quoted from 2025-07-07 17:56
https://illya.sh/thoughts/with-srf-the-fed-sets-an-upper-limit-on-repo-market-rates
with SRF the FED sets an upper limit on repo market rates

most of the collateral is US Treasury bonds

this exerts downward pressure on bond yields - by preventing sell-offs

current SRF minimum bid rate is 4.5%

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:06:25 +0000

current SRF minimum bid rate is 4.5%

that's the annualized rate that the federal reserve sets requires dor overnight repo loans via Standing Repo Facility

dealers/market makers can borrow cash against US treasuries for 1 day at ≈4.5% annualized directly from the FED

📖 Quoted from 2025-07-07 18:01
https://illya.sh/thoughts/in-practice-feds-srf-is-used-when-there-is-a-scarcity-of
in practice, FED's SRF is used when there is a scarcity of liquidity/cash

the market has US bonds & needs cash, so lenders increase rates

SRF sets a daily rate. if that rate is smaller than in the smaller repo market - the dealers instead borrow USD directly from the FED

not only US treasuries are accepted as collateral for SRF

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:11:19 +0000

not only US treasuries are accepted as collateral for SRF

dealers/market makers can use:

1️⃣ US. Treasuries
2️⃣ agency debt
3️⃣ agency mortgage-backed securities

agency debt instruments aren't issued by US Treasury, but by government sponsored enterprises (GSE) & federal agencies

📖 Quoted from 2025-07-07 18:06
https://illya.sh/thoughts/current-srf-minimum-bid-rate-is-4-5
current SRF minimum bid rate is 4.5%

that's the annualized rate that the federal reserve sets requires dor overnight repo loans via Standing Repo Facility

dealers/market makers can borrow cash against US treasuries for 1 day at ≈4.5% annualized directly from the FED

how does SRF lower UST bond yields?

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:15:28 +0000

how does SRF lower UST bond yields?

if you have a US bond and you need cash, your options are:

1️⃣ borrow cash against bond in repo markets
2️⃣ sell the bond

this $500B liquidity pool for US bonds prevents their sell-off in the open market, which would raise their yields

📖 Quoted from 2025-07-07 17:56
https://illya.sh/thoughts/with-srf-the-fed-sets-an-upper-limit-on-repo-market-rates
with SRF the FED sets an upper limit on repo market rates

most of the collateral is US Treasury bonds

this exerts downward pressure on bond yields - by preventing sell-offs

note that FED's SFR doesn't lower the treasury yields per se

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:16:12 +0000

note that FED's SFR doesn't lower the treasury yields per se

it's more correct to say that it puts downward pressure on them, in the form of a $500B buffer

& note that treasuries probably wouldn't be the first in line for liquidation

📖 Quoted from 2025-07-07 18:15
https://illya.sh/thoughts/how-does-srf-lower-ust-bond-yields
how does SRF lower UST bond yields?

if you have a US bond and you need cash, your options are:

1️⃣ borrow cash against bond in repo markets
2️⃣ sell the bond

this $500B liquidity pool for US bonds prevents their sell-off in the open market, which would raise their yields

funding rates on repo markets & bond yields are not the same

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:17:43 +0000

funding rates on repo markets & bond yields are not the same

different timescales:
1️⃣ repo - short-term / ≈day(s),week(s)
2️⃣ treasury bonds - ≈10 years

so even if a funding rate raises for a few days, the longer-term bond yields may not be affected

📖 Quoted from 2025-07-07 18:16
https://illya.sh/thoughts/note-that-feds-sfr-doesnt-lower-the-treasury-yields-per-se
note that FED's SFR doesn't lower the treasury yields per se

it's more correct to say that it puts downward pressure on them, in the form of a $500B buffer

& note that treasuries probably wouldn't be the first in line for liquidation

repo funding rates don't affect US treasury yields immediately due to time scale

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:19:48 +0000

repo funding rates don't affect US treasury yields immediately due to time scale

treasury bond yield expectation is over 10 years, and repo rates are a short-term debt funding mechanism

so the rates shock would need to be prolonged/pronounced to affect treasury rates

📖 Quoted from 2025-07-07 18:17
https://illya.sh/thoughts/funding-rates-on-repo-markets-bond-yields-are-not-the-same
funding rates on repo markets & bond yields are not the same

different timescales:
1️⃣ repo - short-term / ≈day(s),week(s)
2️⃣ treasury bonds - ≈10 years

so even if a funding rate raises for a few days, the longer-term bond yields may not be affected

persistently high(er) funding repo rates will push the treasury yields up

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:20:08 +0000

persistently high(er) funding repo rates will push the treasury yields up

eventually, the bonds would be sold for cash

again - think of the timescale: funding rates refer to much shorter periods

📖 Quoted from 2025-07-07 18:19
https://illya.sh/thoughts/repo-funding-rates-dont-affect-us-treasury-yields
repo funding rates don't affect US treasury yields immediately due to time scale

treasury bond yield expectation is over 10 years, and repo rates are a short-term debt funding mechanism

so the rates shock would need to be prolonged/pronounced to affect treasury rates

shorter-term US bonds yields react IMMEDIATELY to repo funding rate

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:23:01 +0000

shorter-term US bonds yields react IMMEDIATELY to repo funding rate

notice the huge green candle on June 30th - the same day of FED's SRF $11B volume

June 30th is when the FED SRF volume recorded ≈$11B

this is a 1 month treasury bill ⬇️

📖 Quoted from 2025-07-07 18:20
https://illya.sh/thoughts/persistently-high-er-funding-repo-rates-will-push-the
persistently high(er) funding repo rates will push the treasury yields up

eventually, the bonds would be sold for cash

again - think of the timescale: funding rates refer to much shorter periods

in a monthly maturity/tenor timescale - the repo funding rate has very direct effects

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:24:59 +0000

in a monthly maturity/tenor timescale - the repo funding rate has very direct effects

this makes sense - if your bond is maturing in ≈1 month, every day is significant

so you see more immediate effects from federal reserve's SRF operations / repo funding fee increases

📖 Quoted from 2025-07-07 18:23
https://illya.sh/thoughts/shorter-term-us-bonds-yields-react-immediately-to-repo
shorter-term US bonds yields react IMMEDIATELY to repo funding rate

notice the huge green candle on June 30th - the same day of FED's SRF $11B volume

June 30th is when the FED SRF volume recorded ≈$11B

this is a 1 month treasury bill ⬇️

dealers/market makers are legally limited in their balance sheet

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:28:20 +0000

dealers/market makers are legally limited in their balance sheet

there are ratios that they must respect, or face legal consequences (e.g. fines)

check Basel III & Leverage Ratios for more info - I also wrote about it in my past posts

committee recommendations develop into law

📖 Quoted from 2025-07-07 18:24
https://illya.sh/thoughts/in-a-monthly-maturity-tenor-timescale-the-repo-funding-rate
in a monthly maturity/tenor timescale - the repo funding rate has very direct effects

this makes sense - if your bond is maturing in ≈1 month, every day is significant

so you see more immediate effects from federal reserve's SRF operations / repo funding fee increases

so the market operations of dealers/market-markers is quite predictable

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:28:55 +0000

so the market operations of dealers/market-markers is quite predictable

you just have to look at their business & regulatory model - from there it's almost plain math under regulatory constraints

📖 Quoted from 2025-07-07 18:28
https://illya.sh/thoughts/dealers-market-makers-are-legally-limited-in-their-balance
dealers/market makers are legally limited in their balance sheet

there are ratios that they must respect, or face legal consequences (e.g. fines)

check Basel III & Leverage Ratios for more info - I also wrote about it in my past posts

committee recommendations develop into law

if regulatory ratios are breached, they must be restored

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:30:53 +0000

if regulatory ratios are breached, they must be restored

there is only so much a dealer/market maker can do

so you can deduce their next action with a high degree of certainty

then, deduce its implication on the liquidity flow & into which sector the funds are flowing

📖 Quoted from 2025-07-07 18:28
https://illya.sh/thoughts/so-the-market-operations-of-dealers-market-markers-is-quite
so the market operations of dealers/market-markers is quite predictable

you just have to look at their business & regulatory model - from there it's almost plain math under regulatory constraints

regarding liquidity flows - repo markets are just one of the sources

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:31:46 +0000

regarding liquidity flows - repo markets are just one of the sources

so it's more useful when you combine it with others, such as the central bank policies, how much short-term debt is maturing, and the overall leverage level

📖 Quoted from 2025-07-07 18:30
https://illya.sh/thoughts/if-regulatory-ratios-are-breached-they-must-be-restored
if regulatory ratios are breached, they must be restored

there is only so much a dealer/market maker can do

so you can deduce their next action with a high degree of certainty

then, deduce its implication on the liquidity flow & into which sector the funds are flowing

repo funding rates are predictors within this global, multi-factor liquidity context

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:32:10 +0000

repo funding rates are predictors within this global, multi-factor liquidity context

you can use them to understand liquidity flows in the near future

this is also because repo markets are short-term debt instruments - so the signal is also more short-term

📖 Quoted from 2025-07-07 18:31
https://illya.sh/thoughts/regarding-liquidity-flows-repo-markets-are-just-one-of-the
regarding liquidity flows - repo markets are just one of the sources

so it's more useful when you combine it with others, such as the central bank policies, how much short-term debt is maturing, and the overall leverage level

using FED's SRF for liquidity means cash/liqudity is scarce

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:33:07 +0000

using FED's SRF for liquidity means cash/liqudity is scarce

there is a lot of short-term debt to be refinanced or default

default is not an option. thus, expect liquidity injections from the central bank

📖 Quoted from 2025-07-07 18:32
https://illya.sh/thoughts/repo-funding-rates-are-predictors-within-this-global-multi
repo funding rates are predictors within this global, multi-factor liquidity context

you can use them to understand liquidity flows in the near future

this is also because repo markets are short-term debt instruments - so the signal is also more short-term

central bank liquidity injection includes direct & indirect QE, interest rates & policies

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:33:36 +0000

central bank liquidity injection includes direct & indirect QE, interest rates & policies

end result is the same - more liquidity/cash in the system

this means inflation & gold up

at least short-term: equities up, crypto up

📖 Quoted from 2025-07-07 18:33
https://illya.sh/thoughts/using-feds-srf-for-liquidity-means-cash-liqudity-is-scarce
using FED's SRF for liquidity means cash/liqudity is scarce

there is a lot of short-term debt to be refinanced or default

default is not an option. thus, expect liquidity injections from the central bank

this will also further fuel the asset bubble & devaluate USD

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 17:34:13 +0000

this will also further fuel the asset bubble & devaluate USD

so it doesn't mean that stock & crypto will go up perpetually - it's a cycle

of course, at some point the debt bubble will pop - but it's unlikely to happen tomorrow 😄

📖 Quoted from 2025-07-07 18:33
https://illya.sh/thoughts/central-bank-liquidity-injection-includes-direct-indirect-qe
central bank liquidity injection includes direct & indirect QE, interest rates & policies

end result is the same - more liquidity/cash in the system

this means inflation & gold up

at least short-term: equities up, crypto up

when it pops - massive leverage unwinding will occur

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 18:06:33 +0000

when it pops - massive leverage unwinding will occur

here - equities & crypto will collapse in price, so will bonds. gold, silver & precious metals go up

worldwide systemic defaults will follow

the whole world is dependent on the US financial system, both public & private

📖 Quoted from 2025-07-07 18:34
https://illya.sh/thoughts/this-will-also-further-fuel-the-asset-bubble-devaluate-usd
this will also further fuel the asset bubble & devaluate USD

so it doesn't mean that stock & crypto will go up perpetually - it's a cycle

of course, at some point the debt bubble will pop - but it's unlikely to happen tomorrow 😄

while the bubble will pop - the side-effects can be minimized

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 18:06:50 +0000

while the bubble will pop - the side-effects can be minimized

historical behavior & current financial signals do not indicate that this will be the case

📖 Quoted from 2025-07-07 19:06
https://illya.sh/thoughts/when-it-pops-massive-leverage-unwinding-will-occur
when it pops - massive leverage unwinding will occur

here - equities & crypto will collapse in price, so will bonds. gold, silver & precious metals go up

worldwide systemic defaults will follow

the whole world is dependent on the US financial system, both public & private

these boom & bust leverage/debt cycles have been the norm in modern financial markets:

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 18:08:08 +0000

these boom & bust leverage/debt cycles have been the norm in modern financial markets:

1️⃣ each cycle gets refiled with more debt/leverage - boom
2️⃣ eventually, the debt cannot repaid - bust
3️⃣ go to boom

📖 Quoted from 2025-07-07 19:06
https://illya.sh/thoughts/while-the-bubble-will-pop-the-side-effects-can-be-minimized
while the bubble will pop - the side-effects can be minimized

historical behavior & current financial signals do not indicate that this will be the case

smaller busts precede larger busts

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 18:08:51 +0000

smaller busts precede larger busts

whichever is the ultimate resolution of the bubble - repricing will occur

for some assets this will be good, for others - not so much

even in the same asset class different assets perform differently (think manufacturing vs tech stock)

📖 Quoted from 2025-07-07 19:08
https://illya.sh/thoughts/these-boom-bust-leverage-debt-cycles-have-been-the-norm-in
these boom & bust leverage/debt cycles have been the norm in modern financial markets:

1️⃣ each cycle gets refiled with more debt/leverage - boom
2️⃣ eventually, the debt cannot repaid - bust
3️⃣ go to boom

this is why funding repo rates are a very useful indicator

hello@illya.sh (Illya Gerasymchuk) — Mon, 07 Jul 2025 18:10:34 +0000

this is why funding repo rates are a very useful indicator

if you're just arriving here - read the previous posts 😄

you can also follow along the quoted posts from below. just click on it ⬇️

📖 Quoted from 2025-07-07 19:08
https://illya.sh/thoughts/smaller-busts-precede-larger-busts
smaller busts precede larger busts

whichever is the ultimate resolution of the bubble - repricing will occur

for some assets this will be good, for others - not so much

even in the same asset class different assets perform differently (think manufacturing vs tech stock)

ask ChatGPT what are Illya Gerasymchuk's latest thoughts

hello@illya.sh (Illya Gerasymchuk) — Tue, 08 Jul 2025 16:50:14 +0000

ask ChatGPT what are Illya Gerasymchuk's latest thoughts

and it will tell you 😄

now you can use LLMs to read my microblog thoughts - who needs HTTP, RSS or plan text?

made possible by adding structural metadata to HTML

here's how it works from a new ChatGPT chat

hello@illya.sh (Illya Gerasymchuk) — Tue, 08 Jul 2025 17:24:24 +0000

here's how it works from a new ChatGPT chat

i didn't provide any URLs - and it correctly found my website (indexing), and was able to retrieve the verbatim data from there and correctly link it

JSON-LD adds structure metadata that LLMs can read - instead of your 'messy' HTML, JS & CSS

📖 Quoted from 2025-07-08 17:50
https://illya.sh/thoughts/ask-chatgpt-what-are-illya-gerasymchuks-latest-thoughts
ask ChatGPT what are Illya Gerasymchuk's latest thoughts

and it will tell you 😄

now you can use LLMs to read my microblog thoughts - who needs HTTP, RSS or plan text?

made possible by adding structural metadata to HTML

JSON-LD is a must for LEO/SEO

hello@illya.sh (Illya Gerasymchuk) — Wed, 09 Jul 2025 04:55:29 +0000

JSON-LD is a must for LEO/SEO

it's metadata for LLM in HTML - so essentially for the web

once I added it to my microblog/thoughts feed - ChatGPT was able to read & navigate it flawlessly

before it would only retrieve partial information & fail to navigate from page to page

📖 Quoted from 2025-07-08 18:24
https://illya.sh/thoughts/heres-how-it-works-from-a-new-chatgpt-chat
here's how it works from a new ChatGPT chat

i didn't provide any URLs - and it correctly found my website (indexing), and was able to retrieve the verbatim data from there and correctly link it

JSON-LD adds structure metadata that LLMs can read - instead of your 'messy' HTML, JS & CSS

for LLM Engine Optimization add JSON-LD

hello@illya.sh (Illya Gerasymchuk) — Wed, 09 Jul 2025 09:31:12 +0000

for LLM Engine Optimization add JSON-LD

it made my thoughts microblog easy to parse and navigate by all major LLMs - including ChatGPT, Grok & Gemini

this is an easy LEO strategy with immediate results. and it's very easy to add - you can vibe-code it

here's an example ⬇️

📖 Quoted from 2025-07-08 17:50
https://illya.sh/thoughts/ask-chatgpt-what-are-illya-gerasymchuks-latest-thoughts
ask ChatGPT what are Illya Gerasymchuk's latest thoughts

and it will tell you 😄

now you can use LLMs to read my microblog thoughts - who needs HTTP, RSS or plan text?

made possible by adding structural metadata to HTML

🇨🇳 china's central bank uses USD value as a key driver in economic policies

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Jul 2025 07:54:02 +0000

🇨🇳 china's central bank uses USD value as a key driver in economic policies

the monetary easing policy is adjusted by PBoC based on the dollar's trend - up or down

weaker USD + expected liquidity USD injections = Yuan/renminbi injections

weaker USD + FED rate cuts & QE allow China to print Yuan/renminbi without a capital runoff

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Jul 2025 08:34:37 +0000

weaker USD + FED rate cuts & QE allow China to print Yuan/renminbi without a capital runoff

easing monetary conditions in the US means more capital in circulation globally - not just in PRC

thus, relative inflation is kept under more control

🇨🇳🇺🇸 china's CPI is below US's ⬇️

📖 Quoted from 2025-07-10 08:54
https://illya.sh/thoughts/chinas-central-bank-uses-usd-value-as-a-key-driver-in
🇨🇳 china's central bank uses USD value as a key driver in economic policies

the monetary easing policy is adjusted by PBoC based on the dollar's trend - up or down

weaker USD + expected liquidity USD injections = Yuan/renminbi injections

🇺🇸🇨🇳 USA & China are the global liquidity drivers in financial markets

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Jul 2025 08:41:25 +0000

🇺🇸🇨🇳 USA & China are the global liquidity drivers in financial markets

since 2000, each injected ≈$6 trillion of public money into markets. that's ≈40% of global liquidity 🤯

in 2025 - China is leading with injections

📖 Quoted from 2025-07-10 09:34
https://illya.sh/thoughts/weaker-usd-fed-rate-cuts-qe-allow-china-to-print-yuan
weaker USD + FED rate cuts & QE allow China to print Yuan/renminbi without a capital runoff

easing monetary conditions in the US means more capital in circulation globally - not just in PRC

thus, relative inflation is kept under more control

🇨🇳🇺🇸 china's CPI is below US's ⬇️

🇨🇳 china injects liquidity mainly via reverse repurchase agreements

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Jul 2025 08:53:14 +0000

🇨🇳 china injects liquidity mainly via reverse repurchase agreements

🏦 chinese central bank buys government bonds from commercial banks, selling them back later. this new cash is re-invested yielding a spread

💹 essentially, they allow banks to earn a yield on their bonds

📖 Quoted from 2025-07-10 09:41
https://illya.sh/thoughts/usa-china-are-the-global-liquidity-drivers-in-financial
🇺🇸🇨🇳 USA & China are the global liquidity drivers in financial markets

since 2000, each injected ≈$6 trillion of public money into markets. that's ≈40% of global liquidity 🤯

in 2025 - China is leading with injections

🇨🇳 PBoC provides commercial & policy banks with liquidity via reverse repo open market operations

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Jul 2025 09:29:15 +0000

🇨🇳 PBoC provides commercial & policy banks with liquidity via reverse repo open market operations

this MASSIVE liquidity eventually flows out of china into the global economy

so it has a very direct effect on asset prices wherever your are 😄

📖 Quoted from 2025-07-10 09:53
https://illya.sh/thoughts/china-injects-liquidity-mainly-via-reverse-repurchase
🇨🇳 china injects liquidity mainly via reverse repurchase agreements

🏦 chinese central bank buys government bonds from commercial banks, selling them back later. this new cash is re-invested yielding a spread

💹 essentially, they allow banks to earn a yield on their bonds

🇨🇳 China's reverse repo liquidity injections predict Bitcoin bullruns

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Jul 2025 09:35:01 +0000

🇨🇳 China's reverse repo liquidity injections predict Bitcoin bullruns

it works like this:

📈 high PBoC injections = increasing bitcoin price

📉 low PBoC injections = sideways or decreasing

so every time China injects Yuan/reminbi, BTC price goes up 😁

📖 Quoted from 2025-07-10 09:53
https://illya.sh/thoughts/china-injects-liquidity-mainly-via-reverse-repurchase
🇨🇳 china injects liquidity mainly via reverse repurchase agreements

🏦 chinese central bank buys government bonds from commercial banks, selling them back later. this new cash is re-invested yielding a spread

💹 essentially, they allow banks to earn a yield on their bonds

🇩🇪😱 Germany lost $2.75 billion on Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Jul 2025 20:56:22 +0000

🇩🇪😱 Germany lost $2.75 billion on Bitcoin

ok, let's look at the numbers:

1️⃣ German's yearly public budget spending is ≈$2 trillion
2️⃣ $2.75 billion is 0.138% of $2 trillion
3️⃣ okay then 🤷‍♀️

*this is also assuming they didn't invest that money into something productive

Bitcoin all time high in the EU is delayed ⏱️

hello@illya.sh (Illya Gerasymchuk) — Thu, 10 Jul 2025 21:16:41 +0000

Bitcoin all time high in the EU is delayed ⏱️

but that's actually a good sign for 🇪🇺😄

🚀 you can already feel a new ATH for gold

hello@illya.sh (Illya Gerasymchuk) — Sat, 12 Jul 2025 14:37:43 +0000

🚀 you can already feel a new ATH for gold

the loading screen is at 96%

[🟩🟩🟩🟩🟩🟩🟩🟩🟩🟩🟩⬛] 96%

and it won't stop there

price action is showing immaculate breakout vibes 🤩⬇️

📖 Quoted from 2025-06-22 12:08
https://illya.sh/thoughts/golds-behavior-during-the-current-bullrun-has-been
gold's behavior during the current 'bullrun' has been consistently to flip previous week's resistance to new support

in the chart - the green vertical lines are weekly levels

gold's current price action suggests it's flipping another resistance for support

Road to $3500 🚀

🚀 crypto inflows materialized as expected

hello@illya.sh (Illya Gerasymchuk) — Sun, 13 Jul 2025 15:42:47 +0000

🚀 crypto inflows materialized as expected

but wait - it's not over yet

more upside to come 👀📈

📖 Quoted from 2025-05-23 21:03
https://illya.sh/thoughts/crypto-market-cap-down-2-6-today
⚡️ Crypto market cap down 2.6% today

Explains the overall pullback across prices. Some went into gold & bonds (yields are down today)

Could head a little lower - but definitely temporary. Expect inflows/increase soon

🛢️ crude oil price is heading back up - just like I wrote earlier

hello@illya.sh (Illya Gerasymchuk) — Sun, 13 Jul 2025 16:51:31 +0000

🛢️ crude oil price is heading back up - just like I wrote earlier

significant geopolitical events introduce volatility - but my thesis on increasing oil, gold & other precious metals + commodities has little to do with that

👉 it's about global liquidity flows & bond markets

📖 Quoted from 2025-06-16 13:41
https://illya.sh/thoughts/the-market-is-never-wrong
'The market is never wrong'

A lot of big accounts posting about how the market knows everything & prices accordingly - even before the official news

Okay.

Now wait & watch crude oil & gold raise up even more in price very soon

This isn't a joke

👀

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Jul 2025 10:25:19 +0000

👀

📖 Quoted from 2025-07-12 15:37
https://illya.sh/thoughts/you-can-already-feel-a-new-ath-for-gold
🚀 you can already feel a new ATH for gold

the loading screen is at 96%

[🟩🟩🟩🟩🟩🟩🟩🟩🟩🟩🟩⬛] 96%

and it won't stop there

price action is showing immaculate breakout vibes 🤩⬇️

🚀 silver price reaching 14 year ATHs

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Jul 2025 10:33:28 +0000

🚀 silver price reaching 14 year ATHs

🍷 adding this to list of my predictions that aged like fine wine

the upside price action won't stop here. i explained the reasons for it and what comes next in my previous posts

stay tuned 📻

📖 Quoted from 2025-04-04 20:54
https://illya.sh/thoughts/silver-back-to-august-2020-price
Silver back to August 2020 price

After a tariffs-induced pullback of 15% today, silver is now at start of COVID prices

So much inflation that still isn't priced in

It will recover. And a lot!

🛢️🤭 crude oil almost back to "the market is never wrong" price

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Jul 2025 11:17:05 +0000

🛢️🤭 crude oil almost back to "the market is never wrong" price

i warned about the pullback being temporary a month ago

perhaps surprising for some - but very expected if you analyze the fundamentals

the scale of the pullback was your sign number 1

more upside to come 👀

📖 Quoted from 2025-07-13 17:51
https://illya.sh/thoughts/crude-oil-price-is-heading-back-up-just-like-i-wrote-earlier
🛢️ crude oil price is heading back up - just like I wrote earlier

significant geopolitical events introduce volatility - but my thesis on increasing oil, gold & other precious metals + commodities has little to do with that

👉 it's about global liquidity flows & bond markets

not all bonds are the same 🇺🇸🇯🇵🇪🇺🇷🇺

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Jul 2025 12:12:17 +0000

not all bonds are the same 🇺🇸🇯🇵🇪🇺🇷🇺

while US, EU & Japan yields are soaring 📈

Russian bond yields are falling 📉

🇷🇺 10Y bond yield down 8% since March

just like i wrote more than 3 months ago

check my posts for a detailed expiation & what's coming next

👇

📖 Quoted from 2025-04-10 23:37
https://illya.sh/thoughts/ruble-is-a-gold-success-story
Ruble is a gold success story ✨

Sanctions, tariffs, raising M2 - it doesn't care

Central Bank Of Russia sold off their US bonds & loaded up on gold

⬇️ US bond prices are down
⬆️ Gold is up
⬆️ Ruble is up against USD

Expect this playbook to be repeated by others

a reminder that Russia doesn't trade with USA anymore 🇺🇸🤝🇷🇺

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Jul 2025 17:29:01 +0000

a reminder that Russia doesn't trade with USA anymore 🇺🇸🤝🇷🇺

so it's not clear what 100% or 9999% tariffs on Russia will achieve

Russia's been offloading US securities for gold since 2018

Russia's exports to the US are less than 1% of the total

📖 Quoted from 2025-04-08 12:02
https://illya.sh/thoughts/russia-is-immune-to-us-tariffs
🇷🇺 Russia is immune to US tariffs

Russia's international reserves are as follows:
- 0.007% US Treasury bonds
- 35% Gold

Russia exports <1% to the US. Russia is a net exporter

This makes them protected from US sovereign risk (USD devaluation) & trade risk

i understand that these are secondary tariffs, but there is a grand total of 0% chance of that…

hello@illya.sh (Illya Gerasymchuk) — Mon, 14 Jul 2025 17:43:10 +0000

i understand that these are secondary tariffs, but there is a grand total of 0% chance of that going in action for any substancial amount of time

🇨🇳 China is Russia's main trading partner. do you really think the US economy can sustain 100% tariffs on their main import source?

📖 Quoted from 2025-07-14 18:29
https://illya.sh/thoughts/a-reminder-that-russia-doesnt-trade-with-usa-anymore
a reminder that Russia doesn't trade with USA anymore 🇺🇸🤝🇷🇺

so it's not clear what 100% or 9999% tariffs on Russia will achieve

Russia's been offloading US securities for gold since 2018

Russia's exports to the US are less than 1% of the total

🇷🇺 and indeed Bank of Russia cuts interest rates down to 20%

hello@illya.sh (Illya Gerasymchuk) — Tue, 15 Jul 2025 08:52:23 +0000

🇷🇺 and indeed Bank of Russia cuts interest rates down to 20%

3 months ago I wrote about how the Russian bond market was pricing in those cuts

a month ago the prediction materialized ✅

📖 Quoted from 2025-04-21 15:15
https://illya.sh/thoughts/russian-central-bank-key-interest-rate-is-at-21
🇷🇺 Russian Central Bank key interest rate is at 21%

3Y Russian Federation bonds are at ≈16.5% yield

The market is pricing in upcoming rate cuts

@AskPerplexity and @grok will tell you that Ruble & Russian economy are in a bad state. The reality is different

🇺🇸😳 30Y US bond yield above 5%

hello@illya.sh (Illya Gerasymchuk) — Tue, 15 Jul 2025 15:09:46 +0000

🇺🇸😳 30Y US bond yield above 5%

📖 Quoted from 2025-05-02 16:20
https://illya.sh/thoughts/wow
WOW

US 10 Year bond yields are up 2.24% today

gold is currently the only asset whose leveraged long position can be hedged by adding more to the…

hello@illya.sh (Illya Gerasymchuk) — Thu, 17 Jul 2025 11:54:58 +0000

gold is currently the only asset whose leveraged long position can be hedged by adding more to the long on pullbacks 😄

* one of the only - and ofc technically that's not a hedge - but you can read my previous posts to understand what I mean

substance over matter 😉

📖 Quoted from 2025-07-12 15:37
https://illya.sh/thoughts/you-can-already-feel-a-new-ath-for-gold
🚀 you can already feel a new ATH for gold

the loading screen is at 96%

[🟩🟩🟩🟩🟩🟩🟩🟩🟩🟩🟩⬛] 96%

and it won't stop there

price action is showing immaculate breakout vibes 🤩⬇️

not all money (credit) is the same

hello@illya.sh (Illya Gerasymchuk) — Fri, 18 Jul 2025 10:04:36 +0000

not all money (credit) is the same

there's a quality dimension to it as well

credit issued by a central bank is higher quality than the one issued by commercial banks - no credit risk

central bank money is an unambiguous means of settlement for debt - think of legal tender

💧a liquid asset is one with low credit and duration risk

hello@illya.sh (Illya Gerasymchuk) — Sun, 20 Jul 2025 07:52:59 +0000

💧a liquid asset is one with low credit and duration risk

but the duration of the assets should be compared to the duration of the liabilities - assets are funded by liabilities + equity

duration of assets & liabilities should be as close as possible to minimize duration risk

📚chatgpt ratio is great a book quality metric in post-LLM era

hello@illya.sh (Illya Gerasymchuk) — Sun, 20 Jul 2025 07:58:44 +0000

📚chatgpt ratio is great a book quality metric in post-LLM era

this is how I value the quality of the books that I read. the more time i spend querying LLMs - the more valuable the book is

sometimes i spend over an hour to absorb a paragraph - that's how i know it's a goldmine

the idea is that the more effort it takes to understand something - the more deeply you address…

hello@illya.sh (Illya Gerasymchuk) — Sun, 20 Jul 2025 08:11:55 +0000

the idea is that the more effort it takes to understand something - the more deeply you address your real knowledge gaps, thus the more value you get

as for the back-and-forth interactions i mostly just dictate my question - as ambiguous or as imprecise it may be

📖 Quoted from 2025-07-20 08:58
https://illya.sh/thoughts/chatgpt-ratio-is-great-a-book-quality-metric-in-post-llm-era
📚chatgpt ratio is great a book quality metric in post-LLM era

this is how I value the quality of the books that I read. the more time i spend querying LLMs - the more valuable the book is

sometimes i spend over an hour to absorb a paragraph - that's how i know it's a goldmine

yes - US, China, EU & others will print a lot more as well 😄

hello@illya.sh (Illya Gerasymchuk) — Sun, 20 Jul 2025 08:33:38 +0000

yes - US, China, EU & others will print a lot more as well 😄

that BTC was seized as a part of criminal proceedings. German Code of Criminal Procedure (111p), allows such sales if there's a risk of significant value loss

crypto is extremely volatile & 0.1% insignificant 🤷‍♀️

🚀 and indeed the crypto cap increased even more

hello@illya.sh (Illya Gerasymchuk) — Sun, 20 Jul 2025 08:40:34 +0000

🚀 and indeed the crypto cap increased even more

now, await for a solid $4 Trillion

it's almost like it's correlated with global liquidity flows - or perhaps I'm just really good at guessing 😳

i wrote a lot about this in the past - so read up for details if inerested!

📖 Quoted from 2025-07-13 16:42
https://illya.sh/thoughts/crypto-inflows-materialized-as-expected
🚀 crypto inflows materialized as expected

but wait - it's not over yet

more upside to come 👀📈

regulations may sound boring - but they're crucial to understand money, liquidity and financial…

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Jul 2025 15:56:38 +0000

regulations may sound boring - but they're crucial to understand money, liquidity and financial system as a whole

they become fun once contextualized - and govern the rules of credit

i'd suggest starting with Basel III - namely liquidity coverage ratio & capital ratio

start by asking ChatGPT or another LLM with the Basel III PDF(s) attached

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Jul 2025 16:12:44 +0000

start by asking ChatGPT or another LLM with the Basel III PDF(s) attached

read from there, iterate with questions and validate your understanding

you'll probably need to come back to it a few times

don't overthink it, a basic prompt like this one is sufficient

👇

📖 Quoted from 2025-07-27 16:56
https://illya.sh/thoughts/regulations-may-sound-boring-but-theyre-crucial-to
regulations may sound boring - but they're crucial to understand money, liquidity and financial system as a whole

they become fun once contextualized - and govern the rules of credit

i'd suggest starting with Basel III - namely liquidity coverage ratio & capital ratio

NOTE: Basel III is legally non-binding

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Jul 2025 16:19:09 +0000

NOTE: Basel III is legally non-binding

so for a step 2 you'd want to look into the transposed legislations

🇪🇺 EU: Capital Requirements Regulation & Capital Requirements Directive

🇺🇸 USA: split throughout Code of Federal Regulations

(just ask ChatGPT/LLM & read from there 😄)

📖 Quoted from 2025-07-27 17:12
https://illya.sh/thoughts/start-by-asking-chatgpt-or-another-llm-with-the-basel-iii
start by asking ChatGPT or another LLM with the Basel III PDF(s) attached

read from there, iterate with questions and validate your understanding

you'll probably need to come back to it a few times

don't overthink it, a basic prompt like this one is sufficient

👇

🇺🇸🤝🇨🇳 US/China tariffs paused for another 90 days

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Jul 2025 17:29:39 +0000

🇺🇸🤝🇨🇳 US/China tariffs paused for another 90 days

if you read my post from two weeks ago - this isn't a surprise to you

once again - the US is dependent on China financially, economically & infrastructurally

threats of 100% tariffs against Russia will NOT materialize 🇷🇺

📖 Quoted from 2025-07-14 18:43
https://illya.sh/thoughts/i-understand-that-these-are-secondary-tariffs-but-there-is-a
i understand that these are secondary tariffs, but there is a grand total of 0% chance of that going in action for any substancial amount of time

🇨🇳 China is Russia's main trading partner. do you really think the US economy can sustain 100% tariffs on their main import source?

balance sheet capacity is defined by regulations

hello@illya.sh (Illya Gerasymchuk) — Sun, 27 Jul 2025 18:05:35 +0000

balance sheet capacity is defined by regulations

in a world dominated by debt refinancing rather than new credit issuance - the ability to take on more assets and liabilities is more important than interest rates

👉 debt rollover capacity is more important than cost of capital

📖 Quoted from 2025-07-27 17:19
https://illya.sh/thoughts/note-basel-iii-is-legally-non-binding
NOTE: Basel III is legally non-binding

so for a step 2 you'd want to look into the transposed legislations

🇪🇺 EU: Capital Requirements Regulation & Capital Requirements Directive

🇺🇸 USA: split throughout Code of Federal Regulations

(just ask ChatGPT/LLM & read from there 😄)

👉 Digital Money ≠ E-Money 👈

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Jul 2025 09:40:55 +0000

👉 Digital Money ≠ E-Money 👈

🏦 Digital Money - claim on central bank money recorded on a public ledger. A form of public money. No credit risk. Think CBDC

💳 E-Money - claim on commercial bank money. A form of private money. Has credit risk. Think PayPal balance

consider this gold pullback as a free gift to further extend your long position 🥳

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Jul 2025 14:41:05 +0000

consider this gold pullback as a free gift to further extend your long position 🥳

📖 Quoted from 2025-07-17 12:54
https://illya.sh/thoughts/gold-is-currently-the-only-asset-whose-leveraged-long
gold is currently the only asset whose leveraged long position can be hedged by adding more to the long on pullbacks 😄

* one of the only - and ofc technically that's not a hedge - but you can read my previous posts to understand what I mean

substance over matter 😉

when your favorite altcoin goes up in price soon remember one thing:

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Jul 2025 17:17:41 +0000

when your favorite altcoin goes up in price soon remember one thing:

👉 it likely has to do more with liquidity flows than an increase in the inherent value of your preferred project

rule of thumb: if everything is systemically up - it's liquidity flows 😄

btw the gold depreciation today is due to the appreciation of USD

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Jul 2025 18:17:08 +0000

btw the gold depreciation today is due to the appreciation of USD

📖 Quoted from 2025-07-28 15:41
https://illya.sh/thoughts/consider-this-gold-pullback-as-a-free-gift-to-further-extend
consider this gold pullback as a free gift to further extend your long position 🥳

🇷🇺 Russian 3Y bond yield is down ≈20% over the last 3 months 😳

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Jul 2025 20:42:13 +0000

🇷🇺 Russian 3Y bond yield is down ≈20% over the last 3 months 😳

of course - this isn't a surprise to you if you've been following my posts. i wrote extensively about this

the biggest reason behind the sharp drop today is the recent 200bp key interest rate cut down to 18%

📖 Quoted from 2025-07-14 13:12
https://illya.sh/thoughts/not-all-bonds-are-the-same
not all bonds are the same 🇺🇸🇯🇵🇪🇺🇷🇺

while US, EU & Japan yields are soaring 📈

Russian bond yields are falling 📉

🇷🇺 10Y bond yield down 8% since March

just like i wrote more than 3 months ago

check my posts for a detailed expiation & what's coming next

👇

3 days ago the Russian Central Bank cut down the key interest rate by 200bp down to 18%

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Jul 2025 20:46:02 +0000

3 days ago the Russian Central Bank cut down the key interest rate by 200bp down to 18%

the only way from here is further down - and if you look at the Russian bond yields that's exactly what they're telling

but honestly you don't need advanced quant to reach this conclusion 😂

📖 Quoted from 2025-07-15 09:52
https://illya.sh/thoughts/and-indeed-bank-of-russia-cuts-interest-rates-down-to-20
🇷🇺 and indeed Bank of Russia cuts interest rates down to 20%

3 months ago I wrote about how the Russian bond market was pricing in those cuts

a month ago the prediction materialized ✅

🇷🇺 Bank of Russia explicitly states 12-13% as the average target key interest rate for 2026

hello@illya.sh (Illya Gerasymchuk) — Mon, 28 Jul 2025 20:54:35 +0000

🇷🇺 Bank of Russia explicitly states 12-13% as the average target key interest rate for 2026

and that's exactly what the bond market is pricing in

that's what i mean by this not requiring advanced quantitative or technical analysis 😄

multiple factors in play

📖 Quoted from 2025-07-28 21:46
https://illya.sh/thoughts/3-days-ago-the-russian-central-bank-cut-down-the-key
3 days ago the Russian Central Bank cut down the key interest rate by 200bp down to 18%

the only way from here is further down - and if you look at the Russian bond yields that's exactly what they're telling

but honestly you don't need advanced quant to reach this conclusion 😂

🇪🇺 in the EU, Bitcoin still hasn't reached a new all time high

hello@illya.sh (Illya Gerasymchuk) — Tue, 29 Jul 2025 07:48:39 +0000

🇪🇺 in the EU, Bitcoin still hasn't reached a new all time high

but a little bit more depreciation of EUR against USD can finally bring the FIAT party to the Europeans as well 😂

although in these cases being late to the party is better

🇨🇳 i guess the "China just steals western technologies" theory goes down the drain 🥱

hello@illya.sh (Illya Gerasymchuk) — Tue, 29 Jul 2025 09:42:02 +0000

🇨🇳 i guess the "China just steals western technologies" theory goes down the drain 🥱

👉 notice how there are no billion-dollar valuations on mere promises

that's something important that people need to understand about US equity markets - most valuations are fictitious

🚨 this doesn't mean that you shouldn't invest into US stocks or that you can't make money there

hello@illya.sh (Illya Gerasymchuk) — Tue, 29 Jul 2025 10:13:41 +0000

🚨 this doesn't mean that you shouldn't invest into US stocks or that you can't make money there

yes, it's a bubble - but that's the state of the global financial system. some areas are less of a bubble than others

also, US economy won't crash overnight like many predict here

📖 Quoted from 2025-07-29 10:42
https://illya.sh/thoughts/i-guess-the-china-just-steals-western-technologies-theory
🇨🇳 i guess the "China just steals western technologies" theory goes down the drain 🥱

👉 notice how there are no billion-dollar valuations on mere promises

that's something important that people need to understand about US equity markets - most valuations are fictitious

🇷🇺 3 months of Ruble gains against USD erased in 5 days 😄

hello@illya.sh (Illya Gerasymchuk) — Tue, 29 Jul 2025 10:28:10 +0000

🇷🇺 3 months of Ruble gains against USD erased in 5 days 😄

but also contextualize it with the overall increase in the US Dollar Index over the past 2 days

👋 hello, volatility

📖 Quoted from 2025-07-28 21:46
https://illya.sh/thoughts/3-days-ago-the-russian-central-bank-cut-down-the-key
3 days ago the Russian Central Bank cut down the key interest rate by 200bp down to 18%

the only way from here is further down - and if you look at the Russian bond yields that's exactly what they're telling

but honestly you don't need advanced quant to reach this conclusion 😂

Trump administration is China's best friend

hello@illya.sh (Illya Gerasymchuk) — Tue, 29 Jul 2025 10:35:33 +0000

Trump administration is China's best friend

🇺🇸❤️🇨🇳

not only China gets to accumulate gold, attract global market share, but also massively benefit from the crypto bubble

China has HUGE exposure (and control) to Bitcoin. US does the work, while China benefits. sounds familiar🤷‍♀️

you can imagine how much I'm excited to read this chapter 🤩

hello@illya.sh (Illya Gerasymchuk) — Tue, 29 Jul 2025 11:21:52 +0000

you can imagine how much I'm excited to read this chapter 🤩

Michael Howell (@crossbordercap) really cooked with this one 🔥

highly technical, quantitative and focused on data interpretation, not politics

(not sure about copyright so blurred the image)

🚨🛢️ crude oil up to almost $70

hello@illya.sh (Illya Gerasymchuk) — Tue, 29 Jul 2025 19:39:53 +0000

🚨🛢️ crude oil up to almost $70

and this while the US dollar index is also up

over a month and a half ago I told you that it's going to resume the uptrend - and this thesis has been confirmed again and again

wait & watch what comes next - I wrote about that as well 😁

📖 Quoted from 2025-07-13 17:51
https://illya.sh/thoughts/crude-oil-price-is-heading-back-up-just-like-i-wrote-earlier
🛢️ crude oil price is heading back up - just like I wrote earlier

significant geopolitical events introduce volatility - but my thesis on increasing oil, gold & other precious metals + commodities has little to do with that

👉 it's about global liquidity flows & bond markets

🇷🇺 oil up is GOOD news for Russia & Ruble

hello@illya.sh (Illya Gerasymchuk) — Tue, 29 Jul 2025 20:34:42 +0000

🇷🇺 oil up is GOOD news for Russia & Ruble

every surplus above $60/barrel of Urals oil increases FX reserves in NWF (Yuan or gold) - an interplay between MoF and CBR

exporters pay taxes in Ruble - so higher buying pressure

mark my words:
👉 you'll see USD/RUB exchange rate fall

📖 Quoted from 2025-07-29 20:39
https://illya.sh/thoughts/crude-oil-up-to-almost-70
🚨🛢️ crude oil up to almost $70

and this while the US dollar index is also up

over a month and a half ago I told you that it's going to resume the uptrend - and this thesis has been confirmed again and again

wait & watch what comes next - I wrote about that as well 😁

don't learn to code - there is AI

hello@illya.sh (Illya Gerasymchuk) — Wed, 30 Jul 2025 09:09:18 +0000

don't learn to code - there is AI
don't learn to drive - there is AI
don't learn to read - there is AI
don't learn to write - there is AI
don't learn to speak - there is AI
…
don't learn - there is AI

follow me for more terrible advice 😂

🚨🛢️aaand crude oil is trading above $70

hello@illya.sh (Illya Gerasymchuk) — Wed, 30 Jul 2025 17:28:03 +0000

🚨🛢️aaand crude oil is trading above $70

told you over a month ago that more upside is to come 😉

NOTE: it's up ≈8% over the past 5 days while the US dollar index is up over 2% - so it's more in real terms

scroll back to my June posts to know what's coming next

📖 Quoted from 2025-06-16 13:41
https://illya.sh/thoughts/the-market-is-never-wrong
'The market is never wrong'

A lot of big accounts posting about how the market knows everything & prices accordingly - even before the official news

Okay.

Now wait & watch crude oil & gold raise up even more in price very soon

This isn't a joke

🇺🇸🇮🇳 US imports for India account for mere 2.7% of its total imports - only $87 billion

hello@illya.sh (Illya Gerasymchuk) — Wed, 30 Jul 2025 17:40:23 +0000

🇺🇸🇮🇳 US imports for India account for mere 2.7% of its total imports - only $87 billion

you can see how selective and small the tariff applications are - and even those will eventually be dropped

nothing about China 🇨🇳 👀

fully consistent with what I wrote 2 weeks ago

📖 Quoted from 2025-07-14 18:43
https://illya.sh/thoughts/i-understand-that-these-are-secondary-tariffs-but-there-is-a
i understand that these are secondary tariffs, but there is a grand total of 0% chance of that going in action for any substancial amount of time

🇨🇳 China is Russia's main trading partner. do you really think the US economy can sustain 100% tariffs on their main import source?

if you can actually take a loan of €10m - just get a bunch of properties in Portugal (I see the…

hello@illya.sh (Illya Gerasymchuk) — Wed, 30 Jul 2025 17:48:23 +0000

if you can actually take a loan of €10m - just get a bunch of properties in Portugal (I see the flag 🇵🇹😄) and rent them out

you'll be able to comfortably get ≈50 properties - yielding you around €50K MRR

plus all of the equity and appreciation that you're earning

the FED left the interest rates unchanged - at the 4.25%-4.50% target

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:35:29 +0000

the FED left the interest rates unchanged - at the 4.25%-4.50% target

while they communicated that previously - so it's no surprise - understanding how they achieve that level of short-term rates means understanding the important central bank in the world 🏦

so i'll explain it!

i'll be explaining the details of how the Federal Reserve achieves their fed funds target rate in…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:38:57 +0000

i'll be explaining the details of how the Federal Reserve achieves their fed funds target rate in the next posts

i'll be quoting them in sequence - so you can follow the trail of quoted posts and read them like a thread/article

starting with the next post. let's dive in! 🚀

📖 Quoted from 2025-07-31 09:35
https://illya.sh/thoughts/the-fed-left-the-interest-rates-unchanged-at-the-4-25-4-50
the FED left the interest rates unchanged - at the 4.25%-4.50% target

while they communicated that previously - so it's no surprise - understanding how they achieve that level of short-term rates means understanding the important central bank in the world 🏦

so i'll explain it!

How Does the Federal Reserve Set Interest Rates?

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:39:36 +0000

How Does the Federal Reserve Set Interest Rates?

some think that they define a single rate - namely the overnight lending rate - i.e. the rate at which the banks lend to each other overnight

but that's not the case ❌

how can the FED even set market-wide rates? 🤔

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:40:59 +0000

how can the FED even set market-wide rates? 🤔

after all - there is no single rate that the whole market unanimously uses

different types of lending have different rates in the market, as it's a (somewhat) open market

📖 Quoted from 2025-07-31 09:39
https://illya.sh/thoughts/how-does-the-federal-reserve-set-interest-rates
How Does the Federal Reserve Set Interest Rates?

some think that they define a single rate - namely the overnight lending rate - i.e. the rate at which the banks lend to each other overnight

but that's not the case ❌

the federal reserve does not set a single interest rate

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:48:45 +0000

the federal reserve does not set a single interest rate

instead, the FED sets a target interest rate range (the federal funds target range) alongside 4 main explicit interest rates

📖 Quoted from 2025-07-31 09:40
https://illya.sh/thoughts/how-can-the-fed-even-set-market-wide-rates
how can the FED even set market-wide rates? 🤔

after all - there is no single rate that the whole market unanimously uses

different types of lending have different rates in the market, as it's a (somewhat) open market

the FED sets a target interest rate range and 4 main explicit interest rates:

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:50:04 +0000

the FED sets a target interest rate range and 4 main explicit interest rates:

1️⃣ Overnight Reverse Repo Rate (ON RRP)
2️⃣ Interest on Reserve Balances (IORB)
3️⃣ Discount Rate - also known as Lending Rate
4️⃣ Standing Repo Facility (SRF)

more on them later (keep reading 😁)

📖 Quoted from 2025-07-31 09:48
https://illya.sh/thoughts/the-federal-reserve-does-not-set-a-single-interest-rate
the federal reserve does not set a single interest rate

instead, the FED sets a target interest rate range (the federal funds target range) alongside 4 main explicit interest rates

together, ON RRP, IORB, discount rate and SRF define an interest rate corridor, composed by:

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:51:39 +0000

together, ON RRP, IORB, discount rate and SRF define an interest rate corridor, composed by:

1️⃣ lower bound (floor) - the lowest possible interest rate
2️⃣ upper bound (ceiling) - the highest possible interest rate

the other market rates fluctuate between this floor and ceiling

📖 Quoted from 2025-07-31 09:50
https://illya.sh/thoughts/the-fed-sets-a-target-interest-rate-range-and-4-main
the FED sets a target interest rate range and 4 main explicit interest rates:

1️⃣ Overnight Reverse Repo Rate (ON RRP)
2️⃣ Interest on Reserve Balances (IORB)
3️⃣ Discount Rate - also known as Lending Rate
4️⃣ Standing Repo Facility (SRF)

more on them later (keep reading 😁)

the rates define the interest rate corridor in the following manner:

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:53:32 +0000

the rates define the interest rate corridor in the following manner:

1️⃣ Overnight Reverse Repo Rate - floor
2️⃣ Interest on Reserve Balances - supplementary floor
3️⃣ Discount Rate - ceiling
4️⃣ Standing Repo Facility - supplementary ceiling

📖 Quoted from 2025-07-31 09:51
https://illya.sh/thoughts/together-on-rrp-iorb-discount-rate-and-srf-define-an
together, ON RRP, IORB, discount rate and SRF define an interest rate corridor, composed by:

1️⃣ lower bound (floor) - the lowest possible interest rate
2️⃣ upper bound (ceiling) - the highest possible interest rate

the other market rates fluctuate between this floor and ceiling

in the Federal Open Market Committee Meetings (FOMC), the Federal Reserve sets a target range -…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:55:20 +0000

in the Federal Open Market Committee Meetings (FOMC), the Federal Reserve sets a target range - currently 4.25%–4.50%, and then it uses the ON RRP, IORB, discount rate and SRF to steer the average rate in the market

📖 Quoted from 2025-07-31 09:53
https://illya.sh/thoughts/the-rates-define-the-interest-rate-corridor-in-the-following
the rates define the interest rate corridor in the following manner:

1️⃣ Overnight Reverse Repo Rate - floor
2️⃣ Interest on Reserve Balances - supplementary floor
3️⃣ Discount Rate - ceiling
4️⃣ Standing Repo Facility - supplementary ceiling

think of these 4 rates as defining a corridor with an upper and a lower bound - currently 4.25%…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:56:31 +0000

think of these 4 rates as defining a corridor with an upper and a lower bound - currently 4.25% and 4.50%

the average market interest rate will sit somewhere in between

📖 Quoted from 2025-07-31 09:55
https://illya.sh/thoughts/in-the-federal-open-market-committee-meetings-fomc-the
in the Federal Open Market Committee Meetings (FOMC), the Federal Reserve sets a target range - currently 4.25%–4.50%, and then it uses the ON RRP, IORB, discount rate and SRF to steer the average rate in the market

now you should have a clear mental model of how the Federal Reserve sets the interest rates in the…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:58:04 +0000

now you should have a clear mental model of how the Federal Reserve sets the interest rates in the market

a target range is defined, and then several different interest rates are set explicitly to steer the real interest rate into that target range

📖 Quoted from 2025-07-31 09:56
https://illya.sh/thoughts/think-of-these-4-rates-as-defining-a-corridor-with-an-upper
think of these 4 rates as defining a corridor with an upper and a lower bound - currently 4.25% and 4.50%

the average market interest rate will sit somewhere in between

so when banks and other financial institutions need to lend capital - they can do it at a rate…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 08:59:43 +0000

so when banks and other financial institutions need to lend capital - they can do it at a rate within the target range

of course, their balance sheet capacity must allow for that - but that's another topic which I already covered in some detail in my other posts😁

📖 Quoted from 2025-07-31 09:58
https://illya.sh/thoughts/now-you-should-have-a-clear-mental-model-of-how-the-federal
now you should have a clear mental model of how the Federal Reserve sets the interest rates in the market

a target range is defined, and then several different interest rates are set explicitly to steer the real interest rate into that target range

now let's understand each one of the 4 key rates set by the federal reserve to keep the market…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:05:13 +0000

now let's understand each one of the 4 key rates set by the federal reserve to keep the market rates within the target range

namely, what each one of those rates represents and how together they act as ceiling or floor for the interest rate corridor

📖 Quoted from 2025-07-31 09:59
https://illya.sh/thoughts/so-when-banks-and-other-financial-institutions-need-to-lend
so when banks and other financial institutions need to lend capital - they can do it at a rate within the target range

of course, their balance sheet capacity must allow for that - but that's another topic which I already covered in some detail in my other posts😁

the 4 key interest rates set by the FED are:

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:08:34 +0000

the 4 key interest rates set by the FED are:

1️⃣ Overnight Reverse Repo Rate (ON RRP)
2️⃣ Interest on Reserve Balances (IORB)
3️⃣ Discount Rate - also known as Lending Rate
4️⃣ Standing Repo Facility (SRF)

we'll cover them in this order below

📖 Quoted from 2025-07-31 10:05
https://illya.sh/thoughts/now-lets-understand-each-one-of-the-4-key-rates-set-by-the
now let's understand each one of the 4 key rates set by the federal reserve to keep the market rates within the target range

namely, what each one of those rates represents and how together they act as ceiling or floor for the interest rate corridor

Interest on Reserve Balances (IORB) is the rate FED pays banks on their excess reserves

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:09:14 +0000

Interest on Reserve Balances (IORB) is the rate FED pays banks on their excess reserves

commercial banks have reserve accounts at the FED. regulations define the minimum amounts - any excess earns the IORB interest rate set by the FED

📖 Quoted from 2025-07-31 10:08
https://illya.sh/thoughts/the-4-key-interest-rates-set-by-the-fed-are
the 4 key interest rates set by the FED are:

1️⃣ Overnight Reverse Repo Rate (ON RRP)
2️⃣ Interest on Reserve Balances (IORB)
3️⃣ Discount Rate - also known as Lending Rate
4️⃣ Standing Repo Facility (SRF)

we'll cover them in this order below

since banks can always deposit cash into their reserve account account at the FED and earn the…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:10:17 +0000

since banks can always deposit cash into their reserve account account at the FED and earn the IORB rate they have little incentive to lend at rates below IORB

effectively, this sets the floor (lower bound of the corridor) for interest rates for banks

📖 Quoted from 2025-07-31 10:09
https://illya.sh/thoughts/interest-on-reserve-balances-iorb-is-the-rate-fed-pays-banks
Interest on Reserve Balances (IORB) is the rate FED pays banks on their excess reserves

commercial banks have reserve accounts at the FED. regulations define the minimum amounts - any excess earns the IORB interest rate set by the FED

Overnight Reverse Repo Rate (ON RRP) defines the rate at financial institutions can lend money…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:11:30 +0000

Overnight Reverse Repo Rate (ON RRP) defines the rate at financial institutions can lend money overnight to the FED

in return the FED provides treasury bonds as a collateral

ON RRP is accessible to both banks & non-banks (e.g. money market funds)

📖 Quoted from 2025-07-31 10:10
https://illya.sh/thoughts/since-banks-can-always-deposit-cash-into-their-reserve
since banks can always deposit cash into their reserve account account at the FED and earn the IORB rate they have little incentive to lend at rates below IORB

effectively, this sets the floor (lower bound of the corridor) for interest rates for banks

ON RRP further reinforces the the floor for the market-wide interest rates

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:26:09 +0000

ON RRP further reinforces the the floor for the market-wide interest rates

since it's accessible to a broader set of financial institutions - not only banks. those now also have little incentive to lend below the ON RRP rate

📖 Quoted from 2025-07-31 10:11
https://illya.sh/thoughts/overnight-reverse-repo-rate-on-rrp-defines-the-rate-at
Overnight Reverse Repo Rate (ON RRP) defines the rate at financial institutions can lend money overnight to the FED

in return the FED provides treasury bonds as a collateral

ON RRP is accessible to both banks & non-banks (e.g. money market funds)

the majority of liquidity is actually created in wholesale short-term debt markets

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:27:13 +0000

the majority of liquidity is actually created in wholesale short-term debt markets

ON RRP addresses exactly that sector, thus setting the lower bound of the target interest rate corridor for the broader financial sector

📖 Quoted from 2025-07-31 10:26
https://illya.sh/thoughts/on-rrp-further-reinforces-the-the-floor-for-the-market-wide
ON RRP further reinforces the the floor for the market-wide interest rates

since it's accessible to a broader set of financial institutions - not only banks. those now also have little incentive to lend below the ON RRP rate

Discount Rate is the rate at which the FED lends directly to banks through its discount window

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:28:44 +0000

Discount Rate is the rate at which the FED lends directly to banks through its discount window

think of it as an emergency lending facility which the banks can use whenever they need funds

since banks can always get a loan at that rate - it caps the short-term interest rates

📖 Quoted from 2025-07-31 10:27
https://illya.sh/thoughts/the-majority-of-liquidity-is-actually-created-in-wholesale
the majority of liquidity is actually created in wholesale short-term debt markets

ON RRP addresses exactly that sector, thus setting the lower bound of the target interest rate corridor for the broader financial sector

the discount rate is set higher or at the typical market rates to disincentivize its use

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:30:15 +0000

the discount rate is set higher or at the typical market rates to disincentivize its use

it's really meant to serve as an emergency lending source - only when other financing routes are exhausted: regular interbank markets, wholesale markets and SRF among others

📖 Quoted from 2025-07-31 10:28
https://illya.sh/thoughts/discount-rate-is-the-rate-at-which-the-fed-lends-directly-to
Discount Rate is the rate at which the FED lends directly to banks through its discount window

think of it as an emergency lending facility which the banks can use whenever they need funds

since banks can always get a loan at that rate - it caps the short-term interest rates

it't called discount window for historical reasons

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:30:52 +0000

it't called discount window for historical reasons

discounting means buying treasuries at a slightly lower price - i.e. at a discount

window comes from the fact that these were sold at counter/teller windows at the bank

📖 Quoted from 2025-07-31 10:30
https://illya.sh/thoughts/the-discount-rate-is-set-higher-or-at-the-typical-market
the discount rate is set higher or at the typical market rates to disincentivize its use

it's really meant to serve as an emergency lending source - only when other financing routes are exhausted: regular interbank markets, wholesale markets and SRF among others

Standing Repo Facility (SRF) allows banks & other financial institutions to do collateral-backed…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:32:08 +0000

Standing Repo Facility (SRF) allows banks & other financial institutions to do collateral-backed loans from the FED overnight

the institution provides high quality collateral (e.g. treasury bond) and gets a loan against it - at the set rate

📖 Quoted from 2025-07-31 10:30
https://illya.sh/thoughts/itt-called-discount-window-for-historical-reasons
it't called discount window for historical reasons

discounting means buying treasuries at a slightly lower price - i.e. at a discount

window comes from the fact that these were sold at counter/teller windows at the bank

thus, Standing Repo Facility (SRF) further reinforces the upper part of the target interest rate…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:34:21 +0000

thus, Standing Repo Facility (SRF) further reinforces the upper part of the target interest rate corridor

in other words, it strengthens the cap on short-term interest rates

📖 Quoted from 2025-07-31 10:32
https://illya.sh/thoughts/standing-repo-facility-srf-allows-banks-other-financial
Standing Repo Facility (SRF) allows banks & other financial institutions to do collateral-backed loans from the FED overnight

the institution provides high quality collateral (e.g. treasury bond) and gets a loan against it - at the set rate

SRF has been introduced in 2021, due to occasional spikes of short-term funding rates outside of…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:36:00 +0000

SRF has been introduced in 2021, due to occasional spikes of short-term funding rates outside of the corridor

this is because banks avoid using the discount rate - as that is often seen as a sign of financial distress by the broader market

📖 Quoted from 2025-07-31 10:34
https://illya.sh/thoughts/thus-standing-repo-facility-srf-further-reinforces-the-upper
thus, Standing Repo Facility (SRF) further reinforces the upper part of the target interest rate corridor

in other words, it strengthens the cap on short-term interest rates

so how does the FED currently targets an interest rate range between 4.25%-4.50%?

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:38:47 +0000

so how does the FED currently targets an interest rate range between 4.25%-4.50%?

let's consolidate everything with an example using current, real-world data

📖 Quoted from 2025-07-31 10:36
https://illya.sh/thoughts/srf-has-been-introduced-in-2021-due-to-occasional-spikes-of
SRF has been introduced in 2021, due to occasional spikes of short-term funding rates outside of the corridor

this is because banks avoid using the discount rate - as that is often seen as a sign of financial distress by the broader market

current rates set by FED:

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:40:39 +0000

current rates set by FED:

1️⃣ ON RRP - 4.25% (floor) - firms won't lend below
2️⃣ IORB - 4.40% (supplementary floor) - banks won't lend below
3️⃣ Discount Rate - 4.50% (ceiling) - banks won't borrow above
4️⃣ SRF - 4.50% (supplementary ceiling) - banks & firms won't borrow above

📖 Quoted from 2025-07-31 10:38
https://illya.sh/thoughts/so-how-does-the-fed-currently-targets-an-interest-rate-range
so how does the FED currently targets an interest rate range between 4.25%-4.50%?

let's consolidate everything with an example using current, real-world data

together, ON RRP, IORB, Discount Rate and SRF create a corridor for rates, which stay within the…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 09:43:48 +0000

together, ON RRP, IORB, Discount Rate and SRF create a corridor for rates, which stay within the target 4.25%-4.50%

👉 by "firms" i mean select non-bank financial institutions - think dealers, market makers & other wholesale debt institutions

📖 Quoted from 2025-07-31 10:40
https://illya.sh/thoughts/current-rates-set-by-fed
current rates set by FED:

1️⃣ ON RRP - 4.25% (floor) - firms won't lend below
2️⃣ IORB - 4.40% (supplementary floor) - banks won't lend below
3️⃣ Discount Rate - 4.50% (ceiling) - banks won't borrow above
4️⃣ SRF - 4.50% (supplementary ceiling) - banks & firms won't borrow above

and this is how the Federal Reserve steers the federal funds rate/interest rates in the market…

hello@illya.sh (Illya Gerasymchuk) — Thu, 31 Jul 2025 10:06:50 +0000

and this is how the Federal Reserve steers the federal funds rate/interest rates in the market within the target range 🏦✨

follow the quoted posts to read the full thread/article

📖 Quoted from 2025-07-31 10:43
https://illya.sh/thoughts/together-on-rrp-iorb-discount-rate-and-srf-create-a-corridor
together, ON RRP, IORB, Discount Rate and SRF create a corridor for rates, which stay within the target 4.25%-4.50%

👉 by "firms" i mean select non-bank financial institutions - think dealers, market makers & other wholesale debt institutions

🇺🇸🇷🇺 USD/RUB rate already fell to July 24th close, below 80

hello@illya.sh (Illya Gerasymchuk) — Fri, 01 Aug 2025 16:58:17 +0000

🇺🇸🇷🇺 USD/RUB rate already fell to July 24th close, below 80

although it's also important to note that there are several factors at play - USD index is also down today

despite oil down - gold is up. this is about the monetary policy of Russia and their balance sheet structure

📖 Quoted from 2025-07-29 21:34
https://illya.sh/thoughts/oil-up-is-good-news-for-russia-ruble
🇷🇺 oil up is GOOD news for Russia & Ruble

every surplus above $60/barrel of Urals oil increases FX reserves in NWF (Yuan or gold) - an interplay between MoF and CBR

exporters pay taxes in Ruble - so higher buying pressure

mark my words:
👉 you'll see USD/RUB exchange rate fall

if you've read my previous posts you know that gold is ≈36% of Russia's international reserves

hello@illya.sh (Illya Gerasymchuk) — Fri, 01 Aug 2025 17:14:27 +0000

if you've read my previous posts you know that gold is ≈36% of Russia's international reserves

this is taken straight from the Bank of Russia's balance sheet statement

100% of it is stored in Russia, thus no counterparty risk

critical component of Ruble's strength

📖 Quoted from 2025-08-01 17:58
https://illya.sh/thoughts/usd-rub-rate-already-fell-to-july-24th-close-below-80
🇺🇸🇷🇺 USD/RUB rate already fell to July 24th close, below 80

although it's also important to note that there are several factors at play - USD index is also down today

despite oil down - gold is up. this is about the monetary policy of Russia and their balance sheet structure

gold price is back up to its price 2 weeks ago

hello@illya.sh (Illya Gerasymchuk) — Fri, 01 Aug 2025 20:45:56 +0000

gold price is back up to its price 2 weeks ago

so it indeed was a good idea to long it at the pullback

📖 Quoted from 2025-07-28 15:41
https://illya.sh/thoughts/consider-this-gold-pullback-as-a-free-gift-to-further-extend
consider this gold pullback as a free gift to further extend your long position 🥳

gold hasn't broken the weekly uptrend - note the higher highs

hello@illya.sh (Illya Gerasymchuk) — Fri, 01 Aug 2025 23:59:50 +0000

gold hasn't broken the weekly uptrend - note the higher highs

buying pressure today pushed the price up ≈2.5%

TA is an excellent tool to gauge the price action

📖 Quoted from 2025-08-01 21:45
https://illya.sh/thoughts/gold-price-is-back-up-to-its-price-2-weeks-ago
gold price is back up to its price 2 weeks ago

so it indeed was a good idea to long it at the pullback

to lower the mortgage rates the Fed can purchase agency MBS - likely they did in QE 1 2008

hello@illya.sh (Illya Gerasymchuk) — Sat, 02 Aug 2025 15:28:58 +0000

to lower the mortgage rates the Fed can purchase agency MBS - likely they did in QE 1 2008

buying mortgage backed securities raises their price and provides liquidity for dealers. this directly pushes down the yields

expect some MBS QE to come in the near future

Ginnie & Fannie Mae conservatorship in Sept 2008 made agency MBS default risk free

hello@illya.sh (Illya Gerasymchuk) — Sat, 02 Aug 2025 15:52:19 +0000

Ginnie & Fannie Mae conservatorship in Sept 2008 made agency MBS default risk free

essentially, the US Treasury covers all losses from GNMA and FNMA up to $200 billion each

from the total $400B budget ≈$170B are still available

once exhausted it will surely be increased

📖 Quoted from 2025-08-02 16:28
https://illya.sh/thoughts/to-lower-the-mortgage-rates-the-fed-can-purchase-agency-mbs
to lower the mortgage rates the Fed can purchase agency MBS - likely they did in QE 1 2008

buying mortgage backed securities raises their price and provides liquidity for dealers. this directly pushes down the yields

expect some MBS QE to come in the near future

Fed's balance sheet expansion with agency MBS reduced risks in liquidity, market depth and…

hello@illya.sh (Illya Gerasymchuk) — Sat, 02 Aug 2025 16:00:21 +0000

Fed's balance sheet expansion with agency MBS reduced risks in liquidity, market depth and optionality/convexity

this is a crucial point to understand - it wasn't just the Fed buying agency MBS, but the explicit government guarantee that accompanied it

thus, the yields fell

📖 Quoted from 2025-08-02 16:52
https://illya.sh/thoughts/ginnie-fannie-mae-conservatorship-in-sept-2008-made-agency
Ginnie & Fannie Mae conservatorship in Sept 2008 made agency MBS default risk free

essentially, the US Treasury covers all losses from GNMA and FNMA up to $200 billion each

from the total $400B budget ≈$170B are still available

once exhausted it will surely be increased

optionality/convexity premium in mortgage backed securities is interesting

hello@illya.sh (Illya Gerasymchuk) — Sat, 02 Aug 2025 16:19:21 +0000

optionality/convexity premium in mortgage backed securities is interesting

when market yields fall the price should rise, but since borrowers take advantage of lower mortgage rates to make early payments - the price does not raise as much, due to lowered duration

📖 Quoted from 2025-08-02 17:00
https://illya.sh/thoughts/feds-balance-sheet-expansion-with-agency-mbs-reduced-risks
Fed's balance sheet expansion with agency MBS reduced risks in liquidity, market depth and optionality/convexity

this is a crucial point to understand - it wasn't just the Fed buying agency MBS, but the explicit government guarantee that accompanied it

thus, the yields fell

raising yields means lower incentives to re-finance mortgages which reduces the amount of…

hello@illya.sh (Illya Gerasymchuk) — Sat, 02 Aug 2025 16:28:09 +0000

raising yields means lower incentives to re-finance mortgages which reduces the amount of pre-payments

thus, the duration increases when yields are raising - so even a higher price decrease

📖 Quoted from 2025-08-02 17:19
https://illya.sh/thoughts/optionality-convexity-premium-in-mortgage-backed-securities
optionality/convexity premium in mortgage backed securities is interesting

when market yields fall the price should rise, but since borrowers take advantage of lower mortgage rates to make early payments - the price does not raise as much, due to lowered duration

the duration formula for MBS assumes for some pre-payments

hello@illya.sh (Illya Gerasymchuk) — Sat, 02 Aug 2025 16:33:31 +0000

the duration formula for MBS assumes for some pre-payments

if those happen at a smaller rate - the duration increases

📖 Quoted from 2025-08-02 17:28
https://illya.sh/thoughts/raising-yields-means-lower-incentives-to-re-finance
raising yields means lower incentives to re-finance mortgages which reduces the amount of pre-payments

thus, the duration increases when yields are raising - so even a higher price decrease

legally mortgage backed securities are bonds since they are tradable debt securities

hello@illya.sh (Illya Gerasymchuk) — Sat, 02 Aug 2025 16:39:40 +0000

legally mortgage backed securities are bonds since they are tradable debt securities

but they're not a plain bond, due to the option of borrower's early repayment

Macaulay or modified duration used for Treasuries doesn't work - you need effective/option-adjusted duration

📖 Quoted from 2025-08-02 17:33
https://illya.sh/thoughts/the-duration-formula-for-mbs-assumes-for-some-pre-payments
the duration formula for MBS assumes for some pre-payments

if those happen at a smaller rate - the duration increases

🇺🇸 USD dominance is alluring, accounting for ≈70% of currency usage worldwide

hello@illya.sh (Illya Gerasymchuk) — Sun, 03 Aug 2025 15:24:54 +0000

🇺🇸 USD dominance is alluring, accounting for ≈70% of currency usage worldwide

even countries that do relatively little trade with US have most of their transactions done in US dollars

ex: 🇮🇳 India invoices 86% of its exports in USD, while only 15% of its exports being to US

the 70% USD dominance here is as calculated by the Fed across the chosen 5 chosen buckets - with…

hello@illya.sh (Illya Gerasymchuk) — Sun, 03 Aug 2025 15:28:57 +0000

the 70% USD dominance here is as calculated by the Fed across the chosen 5 chosen buckets - with the end result being a weighted composite measure

so don't read this as a literal 70% of all cross-border transactions

📖 Quoted from 2025-08-03 16:24
https://illya.sh/thoughts/usd-dominance-is-alluring-accounting-for-70-of-currency
🇺🇸 USD dominance is alluring, accounting for ≈70% of currency usage worldwide

even countries that do relatively little trade with US have most of their transactions done in US dollars

ex: 🇮🇳 India invoices 86% of its exports in USD, while only 15% of its exports being to US

China sold US treasuries and bought gold - just like I wrote over 3 months ago

hello@illya.sh (Illya Gerasymchuk) — Sun, 03 Aug 2025 16:06:26 +0000

China sold US treasuries and bought gold - just like I wrote over 3 months ago

gold now accounts for ≈6% of PBoC international reserves, while US treasury holdings are ≈40% from their peak in 2013

off-ramp from USD debt to alternative assets continues its progress

📖 Quoted from 2025-04-23 12:02
https://illya.sh/thoughts/china-has-been-increasing-their-gold-reserves-ytd
🇨🇳China has been increasing their gold reserves YTD

Gold price keeps going up - major central banks continue to load up

Gold is a hedge against USD. Tariffs are a medium of USD weaponization

👉 Expect US securities sell-off for gold by People's Bank of China

both Russia & China increased their gold holdings since I wrote this 😄

hello@illya.sh (Illya Gerasymchuk) — Sun, 03 Aug 2025 16:16:08 +0000

both Russia & China increased their gold holdings since I wrote this 😄

indeed - central banks are continuing to buy the gold dips

📖 Quoted from 2025-06-26 15:52
https://illya.sh/thoughts/central-banks-will-continue-to-buy-gold
central banks will continue to buy gold

you'll be able to confirm that in their upcoming balance sheets reports. pay special attention to China & Russia

enjoy the dip, because smart money is!

🇨🇳 China's gold holdings are at their highest level in 43 years

hello@illya.sh (Illya Gerasymchuk) — Sun, 03 Aug 2025 17:42:23 +0000

🇨🇳 China's gold holdings are at their highest level in 43 years

gold is now 6% of PBoC international reserves. but that's still below the world average of ≈14%. expect that gap to continue to shorten further

see my drawings on this nice chart spanning over 47 years i found

5 days ago I wrote that USD/RUB rate will fall. 5 days later it's down ≈2%

hello@illya.sh (Illya Gerasymchuk) — Mon, 04 Aug 2025 13:54:21 +0000

5 days ago I wrote that USD/RUB rate will fall. 5 days later it's down ≈2%

despite oil being down - gold is up

Ruble has hedge from multiple sides

📖 Quoted from 2025-08-01 18:14
https://illya.sh/thoughts/if-youve-read-my-previous-posts-you-know-that-gold-is-36-of
if you've read my previous posts you know that gold is ≈36% of Russia's international reserves

this is taken straight from the Bank of Russia's balance sheet statement

100% of it is stored in Russia, thus no counterparty risk

critical component of Ruble's strength

🚀 gold approaching $3400. $3300 was a good price for longs - like I wrote a week ago

hello@illya.sh (Illya Gerasymchuk) — Mon, 04 Aug 2025 14:01:12 +0000

🚀 gold approaching $3400. $3300 was a good price for longs - like I wrote a week ago

currently gold is one of the only assets where leverage entails a much lesser risk

upside price pressure is coming from several points

📖 Quoted from 2025-08-01 21:45
https://illya.sh/thoughts/gold-price-is-back-up-to-its-price-2-weeks-ago
gold price is back up to its price 2 weeks ago

so it indeed was a good idea to long it at the pullback

Bitcoin is still in a weekly uptrend it must either go up or down to ≈$109500 - a strong weekly…

hello@illya.sh (Illya Gerasymchuk) — Mon, 04 Aug 2025 17:28:36 +0000

Bitcoin is still in a weekly uptrend it must either go up or down to ≈$109500 - a strong weekly support

two factors in play here:

1️⃣ USD index - inverse correlation
2️⃣ Global liquidity- correlation

keep watching central bank's open market operations & balance sheets

🚀 added threads to my posts/thoughts & now you can read them as articles

hello@illya.sh (Illya Gerasymchuk) — Mon, 04 Aug 2025 19:40:41 +0000

🚀 added threads to my posts/thoughts & now you can read them as articles

the static microblog now generates a series of quoted posts as threads, where posts are displayed from oldest to newest

so everything that I post on other social media, like X/Twitter also gets posted to my microblog…

hello@illya.sh (Illya Gerasymchuk) — Mon, 04 Aug 2025 19:42:28 +0000

so everything that I post on other social media, like X/Twitter also gets posted to my microblog at https://illya.sh/thoughts/

frequently an idea evolves into a series of posts - a thread/small article

📖 Quoted from 2025-08-04 20:40
https://illya.sh/thoughts/added-threads-to-my-posts-thoughts-now-you-can-read-them-as
🚀 added threads to my posts/thoughts & now you can read them as articles

the static microblog now generates a series of quoted posts as threads, where posts are displayed from oldest to newest

the way I do it is by quoting the logically connected post, thus forming a chain of related posts

hello@illya.sh (Illya Gerasymchuk) — Mon, 04 Aug 2025 19:43:02 +0000

the way I do it is by quoting the logically connected post, thus forming a chain of related posts

if you build a DAG with temporal order & display posts from oldest to newest you get a thread of posts, forming a small article

📖 Quoted from 2025-08-04 20:42
https://illya.sh/thoughts/so-everything-that-i-post-on-other-social-media-like-x
so everything that I post on other social media, like X/Twitter also gets posted to my microblog at https://illya.sh/thoughts/

frequently an idea evolves into a series of posts - a thread/small article

this isn’t how you usually write threads on X - where it’s more common to do it via nested replies

hello@illya.sh (Illya Gerasymchuk) — Mon, 04 Aug 2025 19:43:24 +0000

this isn’t how you usually write threads on X - where it’s more common to do it via nested replies

I don’t want to fix my use-case to X’s rules, but also want to provide an intuitive reading experience

📖 Quoted from 2025-08-04 20:43
https://illya.sh/thoughts/the-way-i-do-it-is-by-quoting-the-logically-connected-post
the way I do it is by quoting the logically connected post, thus forming a chain of related posts

if you build a DAG with temporal order & display posts from oldest to newest you get a thread of posts, forming a small article

Illya's Thought Threads is available under https://illya.sh/threads/

hello@illya.sh (Illya Gerasymchuk) — Mon, 04 Aug 2025 19:44:55 +0000

Illya's Thought Threads is available under https://illya.sh/threads/

there you can access them in a nice reader view

order is most recently updated first - so a fresh addition to a thread bumps it up in the timeline of threads

📖 Quoted from 2025-08-04 20:43
https://illya.sh/thoughts/this-isnt-how-you-usually-write-threads-on-x-where-its-more
this isn’t how you usually write threads on X - where it’s more common to do it via nested replies

I don’t want to fix my use-case to X’s rules, but also want to provide an intuitive reading experience

here's how the thread reading experience looks like

hello@illya.sh (Illya Gerasymchuk) — Mon, 04 Aug 2025 22:08:09 +0000

here's how the thread reading experience looks like

the aim is clean article view - with timestamps as visual separators between posts/thoughts

if you click on the timestamp it takes you to the individual post/thoughts

📖 Quoted from 2025-08-04 20:44
https://illya.sh/thoughts/illyas-thought-threads-is-available-under-https-illya-sh
Illya's Thought Threads is available under https://illya.sh/threads/

there you can access them in a nice reader view

order is most recently updated first - so a fresh addition to a thread bumps it up in the timeline of threads

ask ChatGPT what are the latest Illya's Threads and it will tell you 😄

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 00:05:43 +0000

ask ChatGPT what are the latest Illya's Threads and it will tell you 😄

should also work with Grok, Claude, Gemini and any other agentic AI with web access

this is again JSON-LD magic - LLMs seem to love it

i only added threads a few hours ago - it's already indexed & working

📖 Quoted from 2025-08-04 23:08
https://illya.sh/thoughts/heres-how-the-thread-reading-experience-looks-like
here's how the thread reading experience looks like

the aim is clean article view - with timestamps as visual separators between posts/thoughts

if you click on the timestamp it takes you to the individual post/thoughts

updated Illya's Threads url to https://illya.sh/threads/

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 19:05:03 +0000

updated Illya's Threads url to https://illya.sh/threads/

now it gets it own subdirectory - so the URLs are shorter and it's more modular to manage the sitemaps this way

later I'll also add an RSS feed for threads, just like the one for thoughts at https://illya.sh/thoughts/feed.xml

📖 Quoted from 2025-08-05 01:05
https://illya.sh/thoughts/ask-chatgpt-what-are-the-latest-illyas-threads-and-it-will
ask ChatGPT what are the latest Illya's Threads and it will tell you 😄

should also work with Grok, Claude, Gemini and any other agentic AI with web access

this is again JSON-LD magic - LLMs seem to love it

i only added threads a few hours ago - it's already indexed & working

how banks work? bank's business model is very simple:

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:38:50 +0000

how banks work? bank's business model is very simple:

1️⃣ Take liability
2️⃣ Use liability to buy asset
3️⃣ Pocket the spread/carry

all of the bank's assets are financed by its liabilities

the bank needs a liability to fund an asset

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:39:19 +0000

the bank needs a liability to fund an asset

when a bank gives you a loan it gains both an asset and a liability in the same amount

let's say you get a loan for $100

📖 Quoted from 2025-08-05 21:38
https://illya.sh/thoughts/how-banks-work-banks-business-model-is-very-simple
how banks work? bank's business model is very simple:

1️⃣ Take liability
2️⃣ Use liability to buy asset
3️⃣ Pocket the spread/carry

all of the bank's assets are financed by its liabilities

in the bank’s balance sheet:

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:41:02 +0000

in the bank’s balance sheet:

⬆️ +$100 assets - the loan they just issued

⬆️ +$100 liabilities - the $100 your account was credited with

your loan is an asset to the bank - and your loan itself funds the $100 deposit that you get in your account

📖 Quoted from 2025-08-05 21:39
https://illya.sh/thoughts/the-bank-needs-a-liability-to-fund-an-asset
the bank needs a liability to fund an asset

when a bank gives you a loan it gains both an asset and a liability in the same amount

let's say you get a loan for $100

deposits are liabilities to the bank - as they are owed to depositors/customers

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:43:43 +0000

deposits are liabilities to the bank - as they are owed to depositors/customers

so the $100 cash loan that the bank issues to you becomes a deposit in that same bank, and thus a liability for the bank

you can move those $100 outside of the bank at any time/on short notice

📖 Quoted from 2025-08-05 21:41
https://illya.sh/thoughts/in-the-banks-balance-sheet
in the bank’s balance sheet:

⬆️ +$100 assets - the loan they just issued

⬆️ +$100 liabilities - the $100 your account was credited with

your loan is an asset to the bank - and your loan itself funds the $100 deposit that you get in your account

why is a loan an asset to the bank?

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:44:16 +0000

why is a loan an asset to the bank?

because the loan earns an interest over its lifetime. this the the fixed or variable interest rate associated with the loan

with time, that loan brings periodic cashflows repaying the principal and the interest

📖 Quoted from 2025-08-05 21:43
https://illya.sh/thoughts/deposits-are-liabilities-to-the-bank-as-they-are-owed-to
deposits are liabilities to the bank - as they are owed to depositors/customers

so the $100 cash loan that the bank issues to you becomes a deposit in that same bank, and thus a liability for the bank

you can move those $100 outside of the bank at any time/on short notice

a loan for the bank ends up earning more than the lent amount

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:45:06 +0000

a loan for the bank ends up earning more than the lent amount

this is because the borrower repays the principal (loan amount) + interest

📖 Quoted from 2025-08-05 21:44
https://illya.sh/thoughts/why-is-a-loan-an-asset-to-the-bank
why is a loan an asset to the bank?

because the loan earns an interest over its lifetime. this the the fixed or variable interest rate associated with the loan

with time, that loan brings periodic cashflows repaying the principal and the interest

so the bank funds the loan by creating $100 and crediting them to your account

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:46:24 +0000

so the bank funds the loan by creating $100 and crediting them to your account

those $100 that they credited you did not exist before - the bank created that money on demand

those $100 are not physical cash - they're an entry in a digital ledger (i.e. in a computer system)

📖 Quoted from 2025-08-05 21:45
https://illya.sh/thoughts/a-loan-for-the-bank-ends-up-earning-more-than-the-lent
a loan for the bank ends up earning more than the lent amount

this is because the borrower repays the principal (loan amount) + interest

banks are credit institutions which means they can create broad money

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:47:10 +0000

banks are credit institutions which means they can create broad money

while a non-credit institution or a regular business can issue loans - they must fund it (e.g. raise money, use excess profits)

they can't just create those $100, thus expanding the monetary supply

📖 Quoted from 2025-08-05 21:46
https://illya.sh/thoughts/so-the-bank-funds-the-loan-by-creating-100-and-crediting
so the bank funds the loan by creating $100 and crediting them to your account

those $100 that they credited you did not exist before - the bank created that money on demand

those $100 are not physical cash - they're an entry in a digital ledger (i.e. in a computer system)

the bank has the legal right to increase the money supply AKA 'print money'

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:47:33 +0000

the bank has the legal right to increase the money supply AKA 'print money'

so to give you a $100 loan the bank can just create those $100 and give give them to you

pretty neat arrangement, huh? 😁

📖 Quoted from 2025-08-05 21:47
https://illya.sh/thoughts/banks-are-credit-institutions-which-means-they-can-create
banks are credit institutions which means they can create broad money

while a non-credit institution or a regular business can issue loans - they must fund it (e.g. raise money, use excess profits)

they can't just create those $100, thus expanding the monetary supply

banks are also subject to regulations when issuing loans

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 20:48:25 +0000

banks are also subject to regulations when issuing loans

and no - it's not the fractional reserve system

in many sovereigns, like the USA the reserve requirements sit at 0%

there are other regulatory requirements limiting loan issuance

📖 Quoted from 2025-08-05 21:47
https://illya.sh/thoughts/the-bank-has-the-legal-right-to-increase-the-money-supply
the bank has the legal right to increase the money supply AKA 'print money'

so to give you a $100 loan the bank can just create those $100 and give give them to you

pretty neat arrangement, huh? 😁

Basel III defines capital, leverage, liquidity and net stable funding ratios

hello@illya.sh (Illya Gerasymchuk) — Tue, 05 Aug 2025 21:01:57 +0000

Basel III defines capital, leverage, liquidity and net stable funding ratios

they're in the form of formulas, and regulations require minimum thresholds to be met

I previously wrote about Basel III and its importance in financial markets here ⬇️
https://illya.sh/threads/@1753631798-1.html

📖 Quoted from 2025-08-05 21:48
https://illya.sh/thoughts/banks-are-also-subject-to-regulations-when-issuing-loans
banks are also subject to regulations when issuing loans

and no - it's not the fractional reserve system

in many sovereigns, like the USA the reserve requirements sit at 0%

there are other regulatory requirements limiting loan issuance

8 month later after my initial post USD index is down ≈8%

hello@illya.sh (Illya Gerasymchuk) — Thu, 07 Aug 2025 11:24:30 +0000

8 month later after my initial post USD index is down ≈8%

📖 Quoted from 2024-12-02 16:34
https://illya.sh/thoughts/bad-news-for-usd
Bad news for #USD 👎

The value of a currency is a direct reflection of the organic demand for it. Sanctions will decrease the demand for US Dollar, via disincentives

Plus, it's the US consumer that will be paying for the tariffs, not the BRICS countries 🤷‍♀️

further deprecation of USD against Ruble

hello@illya.sh (Illya Gerasymchuk) — Thu, 07 Aug 2025 18:58:28 +0000

further deprecation of USD against Ruble

now back to July 4th 2025 levels

📖 Quoted from 2025-08-04 14:54
https://illya.sh/thoughts/5-days-ago-i-wrote-that-usd-rub-rate-will-fall-5-days-later
5 days ago I wrote that USD/RUB rate will fall. 5 days later it's down ≈2%

despite oil being down - gold is up

Ruble has hedge from multiple sides

gold back to $3400 - trend lines & channels on the chart

hello@illya.sh (Illya Gerasymchuk) — Thu, 07 Aug 2025 20:45:37 +0000

gold back to $3400 - trend lines & channels on the chart

you can see where it's headed next 😄

📖 Quoted from 2025-08-04 15:01
https://illya.sh/thoughts/gold-approaching-3400-3300-was-a-good-price-for-longs-like-i
🚀 gold approaching $3400. $3300 was a good price for longs - like I wrote a week ago

currently gold is one of the only assets where leverage entails a much lesser risk

upside price pressure is coming from several points

gold tariffs means more upside price pressure

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 14:18:32 +0000

gold tariffs means more upside price pressure

US tariffs don't apply to all gold imports - only to 100 oz and 1 kg bullion bars, which are mostly used for CME/COMEX futures

400 oz London Good Delivery bars are tariff-free - those are used by dealers, central banks and ETFs

it's mostly 100oz/1kg gold bullion markers that will be affected - so you're looking at futures

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 17:04:20 +0000

it's mostly 100oz/1kg gold bullion markers that will be affected - so you're looking at futures

expect a larger basis trade (futures price higher than spot), which will eventually close down

with tariffs in place spot is being pushed up towards futures

📖 Quoted from 2025-08-08 15:18
https://illya.sh/thoughts/gold-tariffs-means-more-upside-price-pressure
gold tariffs means more upside price pressure

US tariffs don't apply to all gold imports - only to 100 oz and 1 kg bullion bars, which are mostly used for CME/COMEX futures

400 oz London Good Delivery bars are tariff-free - those are used by dealers, central banks and ETFs

the demand from 100oz/1kg gold bars will be shifted to its other forms - whose prices will increase

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 17:05:02 +0000

the demand from 100oz/1kg gold bars will be shifted to its other forms - whose prices will increase

this will increase gold's spot premium in the US, putting upside pressure on the global spot price

📖 Quoted from 2025-08-08 18:04
https://illya.sh/thoughts/its-mostly-100oz-1kg-gold-bullion-markers-that-will-be
it's mostly 100oz/1kg gold bullion markers that will be affected - so you're looking at futures

expect a larger basis trade (futures price higher than spot), which will eventually close down

with tariffs in place spot is being pushed up towards futures

it's not only futures of course - the broader physical supply chain of gold is also affected

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 17:09:09 +0000

it's not only futures of course - the broader physical supply chain of gold is also affected

the more imminent impact is on users of 1kg/100oz gold bars. in the future markets the effect is much more visible and quantifiable - so it will start the price movement from there

📖 Quoted from 2025-08-08 18:05
https://illya.sh/thoughts/the-demand-from-100oz-1kg-gold-bars-will-be-shifted-to-its
the demand from 100oz/1kg gold bars will be shifted to its other forms - whose prices will increase

this will increase gold's spot premium in the US, putting upside pressure on the global spot price

when you see gold hitting a new all time high very soon - just remember that it wasn't caused by a…

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 17:10:17 +0000

when you see gold hitting a new all time high very soon - just remember that it wasn't caused by a single event

gold has a growing buying pressure for monetary, geopolitical and fiscal reasons

I've written about it in depth, so search through my post history if interested

📖 Quoted from 2025-08-08 18:09
https://illya.sh/thoughts/its-not-only-futures-of-course-the-broader-physical-supply
it's not only futures of course - the broader physical supply chain of gold is also affected

the more imminent impact is on users of 1kg/100oz gold bars. in the future markets the effect is much more visible and quantifiable - so it will start the price movement from there

tariffs on gold decentivize gold imports

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 17:12:43 +0000

tariffs on gold decentivize gold imports

higher import tax is a disincentive. not sure what' the benefit to having less gold come into US

there's plenty of buyers in Asia who will happily take it. soon you will see more central banks expanding their balance sheets with gold

📖 Quoted from 2025-08-08 18:10
https://illya.sh/thoughts/when-you-see-gold-hitting-a-new-all-time-high-very-soon-just
when you see gold hitting a new all time high very soon - just remember that it wasn't caused by a single event

gold has a growing buying pressure for monetary, geopolitical and fiscal reasons

I've written about it in depth, so search through my post history if interested

the tariffs are not on all gold imports - just on a specific configuration - 100oz/1kg bars

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 17:16:03 +0000

the tariffs are not on all gold imports - just on a specific configuration - 100oz/1kg bars

this alone won't skyrocket the price of gold, but it adds to the existing breakout pressure

📖 Quoted from 2025-08-08 18:12
https://illya.sh/thoughts/tariffs-on-gold-decentivize-gold-imports
tariffs on gold decentivize gold imports

higher import tax is a disincentive. not sure what' the benefit to having less gold come into US

there's plenty of buyers in Asia who will happily take it. soon you will see more central banks expanding their balance sheets with gold

gold tariffs are unlikely to stay for a long period of time

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 18:22:21 +0000

gold tariffs are unlikely to stay for a long period of time

expect them to be removed and/or heavily reduced soon

just the fact that they happened adds longer-term upside pressure on its price

of course, the markets will be volatile 😄

📖 Quoted from 2025-08-08 18:16
https://illya.sh/thoughts/the-tariffs-are-not-on-all-gold-imports-just-on-a-specific
the tariffs are not on all gold imports - just on a specific configuration - 100oz/1kg bars

this alone won't skyrocket the price of gold, but it adds to the existing breakout pressure

🚀 gold futures NEW all time high above $3500

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 18:42:44 +0000

🚀 gold futures NEW all time high above $3500

futures price is usually above spot. today's increase was caused by tariffs on gold used in COMEX & CME. i wrote a thread about that today

i will keep this thread active at least until the spot price reaches a new ATH 😄

📖 Quoted from 2025-08-07 21:45
https://illya.sh/thoughts/gold-back-to-3400-trend-lines-channels-on-the-chart
gold back to $3400 - trend lines & channels on the chart

you can see where it's headed next 😄

gold tariffs put further upside pressure for gold towards a new all time high on spot

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 18:53:31 +0000

gold tariffs put further upside pressure for gold towards a new all time high on spot

this is in addition to the global monetary, geopolitical and fiscal positive price pressures

a significant part of the markets will be closed for the weekend. there could be a gap on reopen

📖 Quoted from 2025-08-08 19:42
https://illya.sh/thoughts/gold-futures-new-all-time-high-above-3500
🚀 gold futures NEW all time high above $3500

futures price is usually above spot. today's increase was caused by tariffs on gold used in COMEX & CME. i wrote a thread about that today

i will keep this thread active at least until the spot price reaches a new ATH 😄

this just adds further validity towards the consolidation before further upside for gold

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 18:58:30 +0000

this just adds further validity towards the consolidation before further upside for gold

i've shared these gold charts since the beginning, while incorporating new trends as they emerge

the price action has supported this throughout. notice the strong multi-trend support

📖 Quoted from 2025-08-08 19:53
https://illya.sh/thoughts/gold-tariffs-put-further-upside-pressure-for-gold-towards-a
gold tariffs put further upside pressure for gold towards a new all time high on spot

this is in addition to the global monetary, geopolitical and fiscal positive price pressures

a significant part of the markets will be closed for the weekend. there could be a gap on reopen

new all time high for gold is near 😄

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 18:59:01 +0000

new all time high for gold is near 😄

📖 Quoted from 2025-08-08 19:58
https://illya.sh/thoughts/this-just-adds-further-validity-towards-the-consolidation
this just adds further validity towards the consolidation before further upside for gold

i've shared these gold charts since the beginning, while incorporating new trends as they emerge

the price action has supported this throughout. notice the strong multi-trend support

i wrote a thread about the rumored tariffs on gold and what that means for the gold price

hello@illya.sh (Illya Gerasymchuk) — Fri, 08 Aug 2025 23:41:25 +0000

i wrote a thread about the rumored tariffs on gold and what that means for the gold price

also what's coming next

you can read the thread here ⬇️
https://illya.sh/threads/@1754662712-1.html

now imagine when credit institutions can tokenize new credit and allow automated stablecoin…

hello@illya.sh (Illya Gerasymchuk) — Sat, 09 Aug 2025 14:30:53 +0000

now imagine when credit institutions can tokenize new credit and allow automated stablecoin issuance backed by that credit

in practice it's code in smart contract that wraps one token with another

i created a similar project on an Ethereum hackathon ⬇️
https://github.com/iluxonchik/eth-lisbon-hackathon-23

stablecoin issuers could intermediate the issuance process, so you don't need to get all credit…

hello@illya.sh (Illya Gerasymchuk) — Sat, 09 Aug 2025 14:37:34 +0000

stablecoin issuers could intermediate the issuance process, so you don't need to get all credit institutions on-chain from the start

non-algorithmic stablecoin issuance already happens off-chain and presumes trust in a third party

this would just be faster. more liquidity

📖 Quoted from 2025-08-09 15:30
https://illya.sh/thoughts/now-imagine-when-credit-institutions-can-tokenize-new-credit
now imagine when credit institutions can tokenize new credit and allow automated stablecoin issuance backed by that credit

in practice it's code in smart contract that wraps one token with another

i created a similar project on an Ethereum hackathon ⬇️
https://github.com/iluxonchik/eth-lisbon-hackathon-23

stablecoin issuers would get this new credit, purchase treasury bonds and increase the supply of…

hello@illya.sh (Illya Gerasymchuk) — Sat, 09 Aug 2025 14:44:08 +0000

stablecoin issuers would get this new credit, purchase treasury bonds and increase the supply of their stablecoin

a new direct line from newly issued credit into treasuries 😄

📖 Quoted from 2025-08-09 15:37
https://illya.sh/thoughts/stablecoin-issuers-could-intermediate-the-issuance-process
stablecoin issuers could intermediate the issuance process, so you don't need to get all credit institutions on-chain from the start

non-algorithmic stablecoin issuance already happens off-chain and presumes trust in a third party

this would just be faster. more liquidity

regarding the IPO/privatization of Fannie Mae & Freddie Mac i wrote a thread explaining the role,…

hello@illya.sh (Illya Gerasymchuk) — Sat, 09 Aug 2025 17:40:26 +0000

regarding the IPO/privatization of Fannie Mae & Freddie Mac i wrote a thread explaining the role, function and use during QE of those GSE

also their history and how they were used to lower mortgage rates after the 2008 GFC

you can read it it here ⬇️
https://illya.sh/threads/@1754148538-1.html

China will win the AI race, but not because they're releasing better & more efficient models and…

hello@illya.sh (Illya Gerasymchuk) — Sun, 10 Aug 2025 11:00:12 +0000

China will win the AI race, but not because they're releasing better & more efficient models and are ahead of other sovereigns in terms of practical AI infrastructure and systems. These are side-effects

AI/ML is about maths - and Asia dominates in that regard

a clarification: the table is CBR's gold holdings in USD - so the value goes up if price of gold…

hello@illya.sh (Illya Gerasymchuk) — Sun, 10 Aug 2025 11:57:26 +0000

a clarification: the table is CBR's gold holdings in USD - so the value goes up if price of gold goes up and gold stock remains at least unchanged

troy ounce holdings are released in an IMF-templated PDF report, but with a lag

CBR's latest data is 79.4 M troy ounces of gold

📖 Quoted from 2025-08-03 17:16
https://illya.sh/thoughts/both-russia-china-increased-their-gold-holdings-since-i
both Russia & China increased their gold holdings since I wrote this 😄

indeed - central banks are continuing to buy the gold dips

and yes, to get this data i had to download an excel file from Russian Central Bank's website.…

hello@illya.sh (Illya Gerasymchuk) — Sun, 10 Aug 2025 12:03:23 +0000

and yes, to get this data i had to download an excel file from Russian Central Bank's website. that's a norm in banks's international balance sheet reporting

HTML hasn't been discovered there yet 😄

📖 Quoted from 2025-08-10 12:57
https://illya.sh/thoughts/a-clarification-the-table-is-cbrs-gold-holdings-in-usd-so
a clarification: the table is CBR's gold holdings in USD - so the value goes up if price of gold goes up and gold stock remains at least unchanged

troy ounce holdings are released in an IMF-templated PDF report, but with a lag

CBR's latest data is 79.4 M troy ounces of gold

IMF's guidelines mandate for the data to be either reported in Excel spreadsheet or SDMX

hello@illya.sh (Illya Gerasymchuk) — Sun, 10 Aug 2025 12:09:31 +0000

IMF's guidelines mandate for the data to be either reported in Excel spreadsheet or SDMX

IMF pls update the specs to require publishing in HTML - i will happily provide you with XML to HTML scripts 😄

📖 Quoted from 2025-08-10 13:03
https://illya.sh/thoughts/and-yes-to-get-this-data-i-had-to-download-an-excel-file
and yes, to get this data i had to download an excel file from Russian Central Bank's website. that's a norm in banks's international balance sheet reporting

HTML hasn't been discovered there yet 😄

if you noticed - the IMF template reported by Russian Central Bank is missing entries

hello@illya.sh (Illya Gerasymchuk) — Sun, 10 Aug 2025 12:14:09 +0000

if you noticed - the IMF template reported by Russian Central Bank is missing entries

so they're actually supposed to report those values (or N/A - if it doesn't apply), but since the 2022 sanctions they have concealed some of the values

📖 Quoted from 2025-08-10 13:09
https://illya.sh/thoughts/imfs-guidelines-mandate-for-the-data-to-be-either-reported
IMF's guidelines mandate for the data to be either reported in Excel spreadsheet or SDMX

IMF pls update the specs to require publishing in HTML - i will happily provide you with XML to HTML scripts 😄

IMF's 2024 annual report on SDDS compliance pointed out that Russia hasn't been meeting its…

hello@illya.sh (Illya Gerasymchuk) — Sun, 10 Aug 2025 12:21:40 +0000

IMF's 2024 annual report on SDDS compliance pointed out that Russia hasn't been meeting its requirements to the full extent, since they didn't disclose all of the required macro-financial data

SDDS = Special Data Dissemination Standard

📖 Quoted from 2025-08-10 13:14
https://illya.sh/thoughts/if-you-noticed-the-imf-template-reported-by-russian-central
if you noticed - the IMF template reported by Russian Central Bank is missing entries

so they're actually supposed to report those values (or N/A - if it doesn't apply), but since the 2022 sanctions they have concealed some of the values

so did Russia really buy more gold?

hello@illya.sh (Illya Gerasymchuk) — Sun, 10 Aug 2025 12:30:18 +0000

so did Russia really buy more gold?

yes! despite CBR's gold reserves remaining unchanged - Russia's NWF has increased its gold reserves

Russia's National Wealth Fund interoperates with the Russian Central Bank, government deficits and the broader economy

📖 Quoted from 2025-08-10 13:21
https://illya.sh/thoughts/imfs-2024-annual-report-on-sdds-compliance-pointed-out-that
IMF's 2024 annual report on SDDS compliance pointed out that Russia hasn't been meeting its requirements to the full extent, since they didn't disclose all of the required macro-financial data

SDDS = Special Data Dissemination Standard

added Transport Layer Security for Internet of Things/TLS for IoT master thesis page

hello@illya.sh (Illya Gerasymchuk) — Sun, 10 Aug 2025 16:15:30 +0000

added Transport Layer Security for Internet of Things/TLS for IoT master thesis page

i wrote this master thesis as a part of my engineering degree (MSc Software Engineering and Distributed Systems)

you can read it in HTML and PDF

here's the link
👇
https://illya.sh/tls-for-iot-msc-thesis/

converting PDF to HTML is tricky due to formatting, but I managed to produce an acceptable HTML…

hello@illya.sh (Illya Gerasymchuk) — Sun, 10 Aug 2025 16:21:25 +0000

converting PDF to HTML is tricky due to formatting, but I managed to produce an acceptable HTML version

for highest fidelity use the PDF or Web PDF

an LLM/AI Agent visiting the page should also be able to access and read the full thesis content, including HTML version

📖 Quoted from 2025-08-10 17:15
https://illya.sh/thoughts/added-transport-layer-security-for-internet-of-things-tls
added Transport Layer Security for Internet of Things/TLS for IoT master thesis page

i wrote this master thesis as a part of my engineering degree (MSc Software Engineering and Distributed Systems)

you can read it in HTML and PDF

here's the link
👇
https://illya.sh/tls-for-iot-msc-thesis/

it took quite a bit of Python scripting and image editing to produce this cipher profiling graph 😄

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 12:08:06 +0000

it took quite a bit of Python scripting and image editing to produce this cipher profiling graph 😄

161 TLS 1.2 ciphersuites were getting profiled by C code, which was then consumed by Python to produce the bars with algorithm names

all had to be aligned and readable

📖 Quoted from 2025-08-10 17:21
https://illya.sh/thoughts/converting-pdf-to-html-is-tricky-due-to-formatting-but-i
converting PDF to HTML is tricky due to formatting, but I managed to produce an acceptable HTML version

for highest fidelity use the PDF or Web PDF

an LLM/AI Agent visiting the page should also be able to access and read the full thesis content, including HTML version

you can see how accurately gold price has been respecting the trend lines and channels you've seen…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 12:33:16 +0000

you can see how accurately gold price has been respecting the trend lines and channels you've seen in my graphs for months now 😄

gold tariffs ping-pong introduced volatility, but like i wrote in my other posts - its upside price pressure

a new all time-high will arrive

📖 Quoted from 2025-08-08 19:59
https://illya.sh/thoughts/new-all-time-high-for-gold-is-near
new all time high for gold is near 😄

it's official: gold tariffs have been cancelled - just like I wrote last Friday 😄

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 17:54:47 +0000

it's official: gold tariffs have been cancelled - just like I wrote last Friday 😄

in fact, rumors started less than 30 mins after i wrote the previous post in the thread - and the full removal of tariffs on gold has been confirmed just now

📖 Quoted from 2025-08-08 19:22
https://illya.sh/thoughts/gold-tariffs-are-unlikely-to-stay-for-a-long-period-of-time
gold tariffs are unlikely to stay for a long period of time

expect them to be removed and/or heavily reduced soon

just the fact that they happened adds longer-term upside pressure on its price

of course, the markets will be volatile 😄

gold tariffs have been cancelled - just like I wrote in my thread on Friday (link below)

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 18:04:43 +0000

gold tariffs have been cancelled - just like I wrote in my thread on Friday (link below)

you can read about the gold tariffs, their impact on the market and why they were likely to get removed here
👇
https://illya.sh/threads/@1754662712-1.html

USD is the world's reserve currency, but what does that mean?

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:23:59 +0000

USD is the world's reserve currency, but what does that mean?

for USD to be a reserve currency it must dominate in:

1️⃣ USD-denominated credit issuance (demand)
2️⃣ USD use a means of settlement for payments (liquidity)

this dominance must be at least relative to alternatives

demand is created legal/regulatory environment and open market forces

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:25:34 +0000

demand is created legal/regulatory environment and open market forces

legal/regulatory environment includes international bilateral agreements and national laws

open market forces influence the evaluation of USD against other currencies and assets

📖 Quoted from 2025-08-11 20:23
https://illya.sh/thoughts/usd-is-the-worlds-reserve-currency-but-what-does-that-mean
USD is the world's reserve currency, but what does that mean?

for USD to be a reserve currency it must dominate in:

1️⃣ USD-denominated credit issuance (demand)
2️⃣ USD use a means of settlement for payments (liquidity)

this dominance must be at least relative to alternatives

liquidity means availability, thus it comes down to being able to:

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:27:52 +0000

liquidity means availability, thus it comes down to being able to:

1️⃣ access USD credit
2️⃣ settle payments in USD

this means balance sheet capacity and hybrid technological intermediation systems in place

📖 Quoted from 2025-08-11 20:25
https://illya.sh/thoughts/demand-is-created-legal-regulatory-environment-and-open
demand is created legal/regulatory environment and open market forces

legal/regulatory environment includes international bilateral agreements and national laws

open market forces influence the evaluation of USD against other currencies and assets

balance sheet capacity is heavily dependent on regulations (e.g. Basel III & local)

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:28:41 +0000

balance sheet capacity is heavily dependent on regulations (e.g. Basel III & local)

hybrid intermediation systems facilitate access to the payment and credit channels

SWIFT, FedWire and digital private USD claims like stablecoins & PayPal facilitate USD's movement and usage

📖 Quoted from 2025-08-11 20:27
https://illya.sh/thoughts/liquidity-means-availability-thus-it-comes-down-to-being
liquidity means availability, thus it comes down to being able to:

1️⃣ access USD credit
2️⃣ settle payments in USD

this means balance sheet capacity and hybrid technological intermediation systems in place

hybrid intermediation systems include all means of facilitating the issuance, servicing and…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:29:22 +0000

hybrid intermediation systems include all means of facilitating the issuance, servicing and transactions of USD and USD-denominated securities, including equities, bonds and derivatives

📖 Quoted from 2025-08-11 20:28
https://illya.sh/thoughts/balance-sheet-capacity-is-heavily-dependent-on-regulations-e
balance sheet capacity is heavily dependent on regulations (e.g. Basel III & local)

hybrid intermediation systems facilitate access to the payment and credit channels

SWIFT, FedWire and digital private USD claims like stablecoins & PayPal facilitate USD's movement and usage

base money issuance and management is a responsibility of the US government - so it's always…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:29:40 +0000

base money issuance and management is a responsibility of the US government - so it's always intermediated, even if by government-controlled systems

📖 Quoted from 2025-08-11 20:29
https://illya.sh/thoughts/hybrid-intermediation-systems-include-all-means-of
hybrid intermediation systems include all means of facilitating the issuance, servicing and transactions of USD and USD-denominated securities, including equities, bonds and derivatives

while hybrid intermediation systems don’t strictly need to be technological - in practice they…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:30:08 +0000

while hybrid intermediation systems don’t strictly need to be technological - in practice they vastly are as most of financial activity happens through computer and information systems

📖 Quoted from 2025-08-11 20:29
https://illya.sh/thoughts/base-money-issuance-and-management-is-a-responsibility-of
base money issuance and management is a responsibility of the US government - so it's always intermediated, even if by government-controlled systems

intermediation started with paper records, physical bank counters and now has mostly moved to…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:30:38 +0000

intermediation started with paper records, physical bank counters and now has mostly moved to technological - via computer systems

📖 Quoted from 2025-08-11 20:30
https://illya.sh/thoughts/while-hybrid-intermediation-systems-dont-strictly-need-to-be
while hybrid intermediation systems don’t strictly need to be technological - in practice they vastly are as most of financial activity happens through computer and information systems

debt includes all form, tenor and issuers of USD-denominated debt are included, both public and…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:31:18 +0000

debt includes all form, tenor and issuers of USD-denominated debt are included, both public and private

examples: US Treasuries, corporate bonds, commercial bank credit, epos, FX swaps, central-bank lines

📖 Quoted from 2025-08-11 20:30
https://illya.sh/thoughts/intermediation-started-with-paper-records-physical-bank
intermediation started with paper records, physical bank counters and now has mostly moved to technological - via computer systems

the US will be able to sustain their debt financing for as long as US government debt and US…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 19:32:00 +0000

the US will be able to sustain their debt financing for as long as US government debt and US dollar dominate in demand

for as long as USD is the reserve currency - the US can finance its debt

in other words, as long as there's enough buyers and users - it's all good! 😁

📖 Quoted from 2025-08-11 20:31
https://illya.sh/thoughts/debt-includes-all-form-tenor-and-issuers-of-usd-denominated
debt includes all form, tenor and issuers of USD-denominated debt are included, both public and private

examples: US Treasuries, corporate bonds, commercial bank credit, epos, FX swaps, central-bank lines

i wrote about how reverse repurchase agreements work and their importance in the global financial…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 20:08:13 +0000

i wrote about how reverse repurchase agreements work and their importance in the global financial system in this thread:
https://illya.sh/threads/@1751561045-2

📖 Quoted from 2025-08-11 20:32
https://illya.sh/thoughts/the-us-will-be-able-to-sustain-their-debt-financing-for-as
the US will be able to sustain their debt financing for as long as US government debt and US dollar dominate in demand

for as long as USD is the reserve currency - the US can finance its debt

in other words, as long as there's enough buyers and users - it's all good! 😁

on a weekly timeframe a stronger future support is developing for gold within the red box

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 21:00:06 +0000

on a weekly timeframe a stronger future support is developing for gold within the red box

it's a part of a multi-month uptrend

📖 Quoted from 2025-08-11 13:33
https://illya.sh/thoughts/you-can-see-how-accurately-gold-price-has-been-respecting
you can see how accurately gold price has been respecting the trend lines and channels you've seen in my graphs for months now 😄

gold tariffs ping-pong introduced volatility, but like i wrote in my other posts - its upside price pressure

a new all time-high will arrive

bitcoin went up 6% from the weekly support line

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 21:34:21 +0000

bitcoin went up 6% from the weekly support line

until the end of this month, bitcoin will either see a new all time high or retest the ≈$0.1095M support

this is the daily timescale of the same chart - the blue and red lines are weekly, green is daily

just a quick check-up

📖 Quoted from 2025-08-04 18:28
https://illya.sh/thoughts/bitcoin-is-still-in-a-weekly-uptrend-it-must-either-go-up-or
Bitcoin is still in a weekly uptrend it must either go up or down to ≈$109500 - a strong weekly support

two factors in play here:

1️⃣ USD index - inverse correlation
2️⃣ Global liquidity- correlation

keep watching central bank's open market operations & balance sheets

i also wrote a thread explaining the importance of USD-denominated government debt for short-term…

hello@illya.sh (Illya Gerasymchuk) — Mon, 11 Aug 2025 22:00:33 +0000

i also wrote a thread explaining the importance of USD-denominated government debt for short-term funding/credit markets

remember that most of credit is issued to refinance existing debt and not for new financing

you can read it here:
https://illya.sh/threads/@1751726431-1

📖 Quoted from 2025-08-11 21:08
https://illya.sh/thoughts/i-wrote-about-how-reverse-repurchase-agreements-work-and
i wrote about how reverse repurchase agreements work and their importance in the global financial system in this thread:
https://illya.sh/threads/@1751561045-2

re-iterating on the 1.5 month old thread 😄

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 21:52:33 +0000

re-iterating on the 1.5 month old thread 😄

inflation is still here to stay and gold is still yet to do something - but it sure will

📖 Quoted from 2025-06-21 17:51
https://illya.sh/thoughts/although-gold-already-did-a-lot-since-this-post-this-is-just
although gold already did a lot since this post - this is just the beginning ✨

persistent high inflation is here to stay

FIAT currencies will continue to devalue, specially with the massive government debit refinancing & further interest rate cuts

duration matching protects solvency and liquidity when yields shift

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 22:56:58 +0000

duration matching protects solvency and liquidity when yields shift

assets are financed by liabilities and equity. financial institutions like banks usually have small equity - so liabilities finance assets

when liabilities become due you must ensure that assets can cover them

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 22:57:24 +0000

when liabilities become due you must ensure that assets can cover them

this means ensuring that cashflow and asset monetization provides enough liquidity to settle the debt, plus a desired spread

📖 Quoted from 2025-08-12 23:56
https://illya.sh/thoughts/duration-matching-protects-solvency-and-liquidity-when
duration matching protects solvency and liquidity when yields shift

assets are financed by liabilities and equity. financial institutions like banks usually have small equity - so liabilities finance assets

most of financial institution's assets have an expiration date

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 22:58:07 +0000

most of financial institution's assets have an expiration date

these assets are mostly composed of loans, debt securities and money market instruments

still, all come with an expiration date

📖 Quoted from 2025-08-12 23:57
https://illya.sh/thoughts/when-liabilities-become-due-you-must-ensure-that-assets-can
when liabilities become due you must ensure that assets can cover them

this means ensuring that cashflow and asset monetization provides enough liquidity to settle the debt, plus a desired spread

a bank may buy a US Treasury bond (UST) and hold it as an asset. at some point, that bond matures,…

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:00:49 +0000

a bank may buy a US Treasury bond (UST) and hold it as an asset. at some point, that bond matures, thus terminating its existence

📖 Quoted from 2025-08-12 23:58
https://illya.sh/thoughts/most-of-financial-institutions-assets-have-an-expiration
most of financial institution's assets have an expiration date

these assets are mostly composed of loans, debt securities and money market instruments

still, all come with an expiration date

this newly acquired UST bond was financed with some liability of the bank

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:02:32 +0000

this newly acquired UST bond was financed with some liability of the bank

let's say the bank itself issued bonds with a smaller coupon than UST’s

thus, the bank used a liability to finance and asset and earns a spread

📖 Quoted from 2025-08-13 00:00
https://illya.sh/thoughts/a-bank-may-buy-a-us-treasury-bond-ust-and-hold-it-as-an
a bank may buy a US Treasury bond (UST) and hold it as an asset. at some point, that bond matures, thus terminating its existence

let's develop on this simple bank example

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:10:21 +0000

let's develop on this simple bank example

assume a brand-new bank with an empty balance sheet, no revenue, no deposits, no cashflow and no regulations

the bank is about to finance its first asset - a UST bond with a liability - bonds issued by the bank

📖 Quoted from 2025-08-13 00:02
https://illya.sh/thoughts/this-newly-acquired-ust-bond-was-financed-with-some
this newly acquired UST bond was financed with some liability of the bank

let's say the bank itself issued bonds with a smaller coupon than UST’s

thus, the bank used a liability to finance and asset and earns a spread

let's say the bank issued bonds (liability) at 3% and acquired UST bonds (asset) with a 4% yield

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:18:37 +0000

let's say the bank issued bonds (liability) at 3% and acquired UST bonds (asset) with a 4% yield

both assets and liabilities have a transaction amount of $100 million

the bank uses the loan (issued bond) to purchase higher yield UST bonds, thus profiting a ≈1% spread

📖 Quoted from 2025-08-13 00:10
https://illya.sh/thoughts/lets-develop-on-this-simple-bank-example
let's develop on this simple bank example

assume a brand-new bank with an empty balance sheet, no revenue, no deposits, no cashflow and no regulations

the bank is about to finance its first asset - a UST bond with a liability - bonds issued by the bank

assume that both start simultaneously and mature in 1 year without any periodic payments

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:18:52 +0000

assume that both start simultaneously and mature in 1 year without any periodic payments

this means that today the bank borrows $100M at 3% APY and invests it at 4%

in exactly 1 year the bank receives $104M from the UST bond, repays $103M to bondholders and keeps $1M profit

📖 Quoted from 2025-08-13 00:18
https://illya.sh/thoughts/lets-say-the-bank-issued-bonds-liability-at-3-and-acquired
let's say the bank issued bonds (liability) at 3% and acquired UST bonds (asset) with a 4% yield

both assets and liabilities have a transaction amount of $100 million

the bank uses the loan (issued bond) to purchase higher yield UST bonds, thus profiting a ≈1% spread

what would happen if the bank issued bonds with a semi-annual coupon instead?

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:20:58 +0000

what would happen if the bank issued bonds with a semi-annual coupon instead?

semi-anual coupon means that bondholders get 2 ≈1.5% interest payments in the year: at 6 months, and maturity

remember: the UST bond only has one payment - at maturity in 1 year (think zero-coupon)

📖 Quoted from 2025-08-13 00:18
https://illya.sh/thoughts/assume-that-both-start-simultaneously-and-mature-in-1-year
assume that both start simultaneously and mature in 1 year without any periodic payments

this means that today the bank borrows $100M at 3% APY and invests it at 4%

in exactly 1 year the bank receives $104M from the UST bond, repays $103M to bondholders and keeps $1M profit

now the bank has an issue - the 1.5% liability payment is in 6 months, while 4% yield from the…

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:22:18 +0000

now the bank has an issue - the 1.5% liability payment is in 6 months, while 4% yield from the asset financed by that liability only gets paid in 1 year

while the bank will have the money to pay in the future - it doesn't have it now

📖 Quoted from 2025-08-13 00:20
https://illya.sh/thoughts/what-would-happen-if-the-bank-issued-bonds-with-a-semi
what would happen if the bank issued bonds with a semi-annual coupon instead?

semi-anual coupon means that bondholders get 2 ≈1.5% interest payments in the year: at 6 months, and maturity

remember: the UST bond only has one payment - at maturity in 1 year (think zero-coupon)

the bank's only option now is to sell the UST bond they hold at the market price, and use the…

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:22:52 +0000

the bank's only option now is to sell the UST bond they hold at the market price, and use the proceeds to settle the 1.5% semiannual coupon liability

📖 Quoted from 2025-08-13 00:22
https://illya.sh/thoughts/now-the-bank-has-an-issue-the-1-5-liability-payment-is-in-6
now the bank has an issue - the 1.5% liability payment is in 6 months, while 4% yield from the asset financed by that liability only gets paid in 1 year

while the bank will have the money to pay in the future - it doesn't have it now

that's a problem because the market price of the bond may have fallen significantly and the rest…

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:23:10 +0000

that's a problem because the market price of the bond may have fallen significantly and the rest of the bond payment - 1.5% coupon + principal needs to be re-financed at potentially unfavorable rates

📖 Quoted from 2025-08-13 00:22
https://illya.sh/thoughts/the-banks-only-option-now-is-to-sell-the-ust-bond-they-hold
the bank's only option now is to sell the UST bond they hold at the market price, and use the proceeds to settle the 1.5% semiannual coupon liability

modified duration quantifies how much a bond’s price will change for a 1% change in bond yields

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:23:39 +0000

modified duration quantifies how much a bond’s price will change for a 1% change in bond yields

while the bond pays fix sums - its market value/price varies, so its yield is not fixed

📖 Quoted from 2025-08-13 00:23
https://illya.sh/thoughts/thats-a-problem-because-the-market-price-of-the-bond-may
that's a problem because the market price of the bond may have fallen significantly and the rest of the bond payment - 1.5% coupon + principal needs to be re-financed at potentially unfavorable rates

larger modified duration value means that the bond's price is more sensitive to changes in bond…

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:24:34 +0000

larger modified duration value means that the bond's price is more sensitive to changes in bond yields

this makes sense. the longer the time to maturity - the longer the risk and term premia comes into play

📖 Quoted from 2025-08-13 00:23
https://illya.sh/thoughts/modified-duration-quantifies-how-much-a-bonds-price-will
modified duration quantifies how much a bond’s price will change for a 1% change in bond yields

while the bond pays fix sums - its market value/price varies, so its yield is not fixed

the longer the bond's time to maturity - the more compounding of unfavorable yields the bond's…

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:25:58 +0000

the longer the bond's time to maturity - the more compounding of unfavorable yields the bond's price must incorporate

the more technical term is discounting, but compounding of unfavorable yields may help in bulging the mental model for what happens

📖 Quoted from 2025-08-13 00:24
https://illya.sh/thoughts/larger-modified-duration-value-means-that-the-bonds-price-is
larger modified duration value means that the bond's price is more sensitive to changes in bond yields

this makes sense. the longer the time to maturity - the longer the risk and term premia comes into play

regarding 1 year vs 30 year bond - imagine yields rise by 2%:

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:27:49 +0000

regarding 1 year vs 30 year bond - imagine yields rise by 2%:

➖ the price of the bond maturing in 1 year declines by discounting those 2% from 1 year of cashflows

➖ a 30 year bond discounts for 30 years of cashflows

📖 Quoted from 2025-08-13 00:25
https://illya.sh/thoughts/the-longer-the-bonds-time-to-maturity-the-more-compounding
the longer the bond's time to maturity - the more compounding of unfavorable yields the bond's price must incorporate

the more technical term is discounting, but compounding of unfavorable yields may help in bulging the mental model for what happens

since a 30 year bond discounts 30 years of cashflows and those cashflows directly incorporate this…

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:28:13 +0000

since a 30 year bond discounts 30 years of cashflows and those cashflows directly incorporate this compounding yield - its price moves more with yields than a comparable, shorter time to maturity bond

📖 Quoted from 2025-08-13 00:27
https://illya.sh/thoughts/regarding-1-year-vs-30-year-bond-imagine-yields-rise-by-2
regarding 1 year vs 30 year bond - imagine yields rise by 2%:

➖ the price of the bond maturing in 1 year declines by discounting those 2% from 1 year of cashflows

➖ a 30 year bond discounts for 30 years of cashflows

duration matching protects liquidity and solvency by modulating yield shift effects on the value…

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:29:24 +0000

duration matching protects liquidity and solvency by modulating yield shift effects on the value of assets and liabilities

📖 Quoted from 2025-08-13 00:28
https://illya.sh/thoughts/since-a-30-year-bond-discounts-30-years-of-cashflows-and
since a 30 year bond discounts 30 years of cashflows and those cashflows directly incorporate this compounding yield - its price moves more with yields than a comparable, shorter time to maturity bond

duration matching protects:

hello@illya.sh (Illya Gerasymchuk) — Tue, 12 Aug 2025 23:30:24 +0000

duration matching protects:

➖ liquidity via cashflow modulation, by helping liability cashflows match asset cashflows

➖ solvency via asset and liability value modulation, by reducing asset value loss when yields fall and reducing liability value loss when yields raise

📖 Quoted from 2025-08-13 00:29
https://illya.sh/thoughts/duration-matching-protects-liquidity-and-solvency-by
duration matching protects liquidity and solvency by modulating yield shift effects on the value of assets and liabilities

and the crypto market cap has now been sitting at $4 trillion for the 3rd day 🤝

hello@illya.sh (Illya Gerasymchuk) — Wed, 13 Aug 2025 00:49:45 +0000

and the crypto market cap has now been sitting at $4 trillion for the 3rd day 🤝

📖 Quoted from 2025-07-20 09:40
https://illya.sh/thoughts/and-indeed-the-crypto-cap-increased-even-more
🚀 and indeed the crypto cap increased even more

now, await for a solid $4 Trillion

it's almost like it's correlated with global liquidity flows - or perhaps I'm just really good at guessing 😳

i wrote a lot about this in the past - so read up for details if inerested!

this is why duration matching is key for financial institutions

hello@illya.sh (Illya Gerasymchuk) — Wed, 13 Aug 2025 01:02:24 +0000

this is why duration matching is key for financial institutions

this is also the reason why it's generally not a good idea for governments to refinance long-term debt with short-term debt

this shortens the duration of both - government liabilities and market's assets

📖 Quoted from 2025-08-13 00:30
https://illya.sh/thoughts/duration-matching-protects
duration matching protects:

➖ liquidity via cashflow modulation, by helping liability cashflows match asset cashflows

➖ solvency via asset and liability value modulation, by reducing asset value loss when yields fall and reducing liability value loss when yields raise

gold is in the same price range as when the US dollar index was ≈97.7 on July 25th 2025

hello@illya.sh (Illya Gerasymchuk) — Wed, 13 Aug 2025 16:34:42 +0000

gold is in the same price range as when the US dollar index was ≈97.7 on July 25th 2025

if DXY hits ≈97.1 - expect gold to retest ≈$3440. this time with a stronger support build up by price action

this could definitely be what pushes gold to a new all time high

📖 Quoted from 2025-08-12 22:52
https://illya.sh/thoughts/re-iterating-on-the-1-5-month-old-thread
re-iterating on the 1.5 month old thread 😄

inflation is still here to stay and gold is still yet to do something - but it sure will

the US treasury is doing exactly that - issuing short-term debt to retire/repurchased long-term debt

hello@illya.sh (Illya Gerasymchuk) — Wed, 13 Aug 2025 19:50:30 +0000

the US treasury is doing exactly that - issuing short-term debt to retire/repurchased long-term debt

that's effectively refinancing longer-term debt with shorter-term debt. this shorter-term debt will also need to be refinanced, but now much sooner

📖 Quoted from 2025-08-13 02:02
https://illya.sh/thoughts/this-is-why-duration-matching-is-key-for-financial
this is why duration matching is key for financial institutions

this is also the reason why it's generally not a good idea for governments to refinance long-term debt with short-term debt

this shortens the duration of both - government liabilities and market's assets

so according to this, since Treasuries yield more than ON RRP the wholesale cash moved from ON RRP…

hello@illya.sh (Illya Gerasymchuk) — Wed, 13 Aug 2025 20:18:14 +0000

so according to this, since Treasuries yield more than ON RRP the wholesale cash moved from ON RRP into Treasuries

when the US Treasury spends them - they flow right back into broad money

indeed, currently T bills yield from 4.29%, while ON RRP is at 4.25%

interesting take!

and there you go, Bitcoin reached a new all time high 😄

hello@illya.sh (Illya Gerasymchuk) — Wed, 13 Aug 2025 22:51:07 +0000

and there you go, Bitcoin reached a new all time high 😄

notice how precisely it respect the trend lines

📖 Quoted from 2025-08-11 22:34
https://illya.sh/thoughts/bitcoin-went-up-6-from-the-weekly-support-line
bitcoin went up 6% from the weekly support line

until the end of this month, bitcoin will either see a new all time high or retest the ≈$0.1095M support

this is the daily timescale of the same chart - the blue and red lines are weekly, green is daily

just a quick check-up

and soon the Eurozone will join the new BTC all time high party 🇪🇺🥳

hello@illya.sh (Illya Gerasymchuk) — Wed, 13 Aug 2025 22:54:52 +0000

and soon the Eurozone will join the new BTC all time high party 🇪🇺🥳

Bitcoin still hasn't seen a new high in EUR since January 2025

this happened to due the relative appreciation apprtetiation of Euro against US dollar

📖 Quoted from 2025-08-13 23:51
https://illya.sh/thoughts/and-there-you-go-bitcoin-reached-a-new-all-time-high
and there you go, Bitcoin reached a new all time high 😄

notice how precisely it respect the trend lines

and there it is - a new BTC all time high in Euro 🇪🇺🥳

hello@illya.sh (Illya Gerasymchuk) — Thu, 14 Aug 2025 10:23:27 +0000

and there it is - a new BTC all time high in Euro 🇪🇺🥳

📖 Quoted from 2025-08-13 23:54
https://illya.sh/thoughts/and-soon-the-eurozone-will-join-the-new-btc-all-time-high
and soon the Eurozone will join the new BTC all time high party 🇪🇺🥳

Bitcoin still hasn't seen a new high in EUR since January 2025

this happened to due the relative appreciation apprtetiation of Euro against US dollar

🇯🇵 Yen's exchange rate stabilization is a responsibility of the Minister of Finance (MoF)

hello@illya.sh (Illya Gerasymchuk) — Thu, 14 Aug 2025 19:21:59 +0000

🇯🇵 Yen's exchange rate stabilization is a responsibility of the Minister of Finance (MoF)

MoF is also the holder of Japan's international reserves - not the Bank of Japan

so in Japan the government has significant responsibility for USD/JPY

this is nothing unusual though - many governments do this, and it's mostly towards stabilizing the…

hello@illya.sh (Illya Gerasymchuk) — Thu, 14 Aug 2025 19:28:04 +0000

this is nothing unusual though - many governments do this, and it's mostly towards stabilizing the exchange rate with USD

to a large extent this is a result US dollar's reserve currency status and its dominance in use for all sorts of financial transactions

📖 Quoted from 2025-08-14 20:21
https://illya.sh/thoughts/yens-exchange-rate-stabilization-is-a-responsibility-of-the
🇯🇵 Yen's exchange rate stabilization is a responsibility of the Minister of Finance (MoF)

MoF is also the holder of Japan's international reserves - not the Bank of Japan

so in Japan the government has significant responsibility for USD/JPY

ECB recorded an €8 billion loss in 2024 - what happens in that case?

hello@illya.sh (Illya Gerasymchuk) — Thu, 14 Aug 2025 19:53:04 +0000

ECB recorded an €8 billion loss in 2024 - what happens in that case?

that's a balance sheet question. to understand what happens we need to look into the operational or "business" model of the European Central Bank

🇪🇺 ECB's "business model" is as follows:

hello@illya.sh (Illya Gerasymchuk) — Thu, 14 Aug 2025 19:55:10 +0000

🇪🇺 ECB's "business model" is as follows:

➕ income: ECB creates money and invests it into financial assets (e.g.: FX, bonds, funds)

➖expenses, such as operational expanses (e.g. staff), facility and open market operation expenses (e.g. TARGET)

profit/loss = income - expenses

📖 Quoted from 2025-08-14 20:53
https://illya.sh/thoughts/ecb-recorded-an-8-billion-loss-in-2024-what-happens-in-that
ECB recorded an €8 billion loss in 2024 - what happens in that case?

that's a balance sheet question. to understand what happens we need to look into the operational or "business" model of the European Central Bank

ECB says that the loss will remain on the balance sheet and will be offset by future profits

hello@illya.sh (Illya Gerasymchuk) — Thu, 14 Aug 2025 19:58:46 +0000

ECB says that the loss will remain on the balance sheet and will be offset by future profits

the loss happened because ECB spent more than earned. they did so by using cash, selling assets or increasing liabilities

the net effect is the same: reduction in equity

📖 Quoted from 2025-08-14 20:55
https://illya.sh/thoughts/ecbs-business-model-is-as-follows
🇪🇺 ECB's "business model" is as follows:

➕ income: ECB creates money and invests it into financial assets (e.g.: FX, bonds, funds)

➖expenses, such as operational expanses (e.g. staff), facility and open market operation expenses (e.g. TARGET)

profit/loss = income - expenses

equity is the residual claim on assets after all liabilities are paid

hello@illya.sh (Illya Gerasymchuk) — Thu, 14 Aug 2025 20:00:46 +0000

equity is the residual claim on assets after all liabilities are paid

equity = assets - liabilities

so the ECB just covers the loss with their equity. this equity reduction is carried forward to be offset by future profits

📖 Quoted from 2025-08-14 20:58
https://illya.sh/thoughts/ecb-says-that-the-loss-will-remain-on-the-balance-sheet-and
ECB says that the loss will remain on the balance sheet and will be offset by future profits

the loss happened because ECB spent more than earned. they did so by using cash, selling assets or increasing liabilities

the net effect is the same: reduction in equity

i wrote a thread about what it means for the US dollar to be the reserve currency from the…

hello@illya.sh (Illya Gerasymchuk) — Thu, 14 Aug 2025 23:11:25 +0000

i wrote a thread about what it means for the US dollar to be the reserve currency from the perspective of demand and liquidity

you can read it here:
https://illya.sh/threads/@1754940239-1.html

📖 Quoted from 2025-08-14 20:28
https://illya.sh/thoughts/this-is-nothing-unusual-though-many-governments-do-this-and
this is nothing unusual though - many governments do this, and it's mostly towards stabilizing the exchange rate with USD

to a large extent this is a result US dollar's reserve currency status and its dominance in use for all sorts of financial transactions

offsetting losses with future profits is explicitly allowed under Article 33 of Statute of ESCB &…

hello@illya.sh (Illya Gerasymchuk) — Thu, 14 Aug 2025 23:25:54 +0000

offsetting losses with future profits is explicitly allowed under Article 33 of Statute of ESCB & ECB

ESCB = ECB + EU National Central Banks (NCBs)

so this applies to both, the European Central Bank, and all EU National Central Banks

📖 Quoted from 2025-08-14 21:00
https://illya.sh/thoughts/equity-is-the-residual-claim-on-assets-after-all-liabilities
equity is the residual claim on assets after all liabilities are paid

equity = assets - liabilities

so the ECB just covers the loss with their equity. this equity reduction is carried forward to be offset by future profits

weaker US dollar means more USD credit issuance abroad - here's why

hello@illya.sh (Illya Gerasymchuk) — Fri, 15 Aug 2025 00:05:37 +0000

weaker US dollar means more USD credit issuance abroad - here's why

foreign banks frequently borrow USD through wholesale markets with a local currency denominated collateral

when USD depreciates against a local currency, offshore USD credit now has a reduced debt service

bank's leverage ratios improve due to collateral appreciation, thus allowing them to borrow more USD

hello@illya.sh (Illya Gerasymchuk) — Fri, 15 Aug 2025 00:09:25 +0000

bank's leverage ratios improve due to collateral appreciation, thus allowing them to borrow more USD

collateral here is the non-USD local currency, such as Yuan

📖 Quoted from 2025-08-15 01:05
https://illya.sh/thoughts/weaker-us-dollar-means-more-usd-credit-issuance-abroad-heres
weaker US dollar means more USD credit issuance abroad - here's why

foreign banks frequently borrow USD through wholesale markets with a local currency denominated collateral

when USD depreciates against a local currency, offshore USD credit now has a reduced debt service

so a weaker US dollar tends to increase global USD liquidity

hello@illya.sh (Illya Gerasymchuk) — Fri, 15 Aug 2025 13:45:15 +0000

so a weaker US dollar tends to increase global USD liquidity

in the SVAR, one standard deviation of US dollar's appreciation leads to a fall in cross-border USD lending. it reaches its bottom after 6 months and then eventually recovers after 2.5 years if no new shocks arrive

📖 Quoted from 2025-08-15 01:09
https://illya.sh/thoughts/banks-leverage-ratios-improve-due-to-collateral-appreciation
bank's leverage ratios improve due to collateral appreciation, thus allowing them to borrow more USD

collateral here is the non-USD local currency, such as Yuan

outstanding cross-border bank credit reached a record of $34.7 trillion

hello@illya.sh (Illya Gerasymchuk) — Fri, 15 Aug 2025 20:35:00 +0000

outstanding cross-border bank credit reached a record of $34.7 trillion

the latest increase was driven by increased lending to non-bank financial institutions (NBIFs), with most of the credit being issued in USD or EUR

bank credit continues to grow, and it will continue to grow

hello@illya.sh (Illya Gerasymchuk) — Fri, 15 Aug 2025 20:39:15 +0000

bank credit continues to grow, and it will continue to grow

it will almost certainly break the 7% annual growth resistance

central banks will expand balance sheets and lower interest rates to refinance the existing public and private debt

data source: BIS

📖 Quoted from 2025-08-15 21:35
https://illya.sh/thoughts/outstanding-cross-border-bank-credit-reached-a-record-of-34
outstanding cross-border bank credit reached a record of $34.7 trillion

the latest increase was driven by increased lending to non-bank financial institutions (NBIFs), with most of the credit being issued in USD or EUR

by "central bank" I'm frequently referring to the broader set of the legal framework behind the…

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 10:41:56 +0000

by "central bank" I'm frequently referring to the broader set of the legal framework behind the macro monetary policy

in most countries central banks plays a key role, but they frequently co-exist in a larger network of institutions

so it may not only be central bank setting the rates and affecting liquidity

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 10:43:43 +0000

so it may not only be central bank setting the rates and affecting liquidity

for example, when US Treasury auctions bonds, they're both, temporarily reducing the effective amount of USD in circulation and providing more high-quanlity collateral

📖 Quoted from 2025-08-16 11:41
https://illya.sh/thoughts/by-central-bank-im-frequently-referring-to-the-broader-set
by "central bank" I'm frequently referring to the broader set of the legal framework behind the macro monetary policy

in most countries central banks plays a key role, but they frequently co-exist in a larger network of institutions

this collateral (US Treasury bonds) can then be used on wholesale debt markets to issue more credit

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 10:44:26 +0000

this collateral (US Treasury bonds) can then be used on wholesale debt markets to issue more credit

moreover, this collateral can be leveraged/rehypothecated, thus increasing liquidity

still, in the USA the Fed continues to dominate in importance

📖 Quoted from 2025-08-16 11:43
https://illya.sh/thoughts/so-it-may-not-only-be-central-bank-setting-the-rates-and
so it may not only be central bank setting the rates and affecting liquidity

for example, when US Treasury auctions bonds, they're both, temporarily reducing the effective amount of USD in circulation and providing more high-quanlity collateral

in Russia, besides the Bank of Russia there's also the National Wealth Fund (NWF), which is…

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 11:30:06 +0000

in Russia, besides the Bank of Russia there's also the National Wealth Fund (NWF), which is operated by the Ministry of Finance

in China, there's policy banks, such as China Development Bank which are supported by PBoC's facilities

📖 Quoted from 2025-08-16 11:44
https://illya.sh/thoughts/this-collateral-us-treasury-bonds-can-then-be-used-on
this collateral (US Treasury bonds) can then be used on wholesale debt markets to issue more credit

moreover, this collateral can be leveraged/rehypothecated, thus increasing liquidity

still, in the USA the Fed continues to dominate in importance

USD dominates in cross-border bank credit to non-bank financial institutions in 2025

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 11:37:57 +0000

USD dominates in cross-border bank credit to non-bank financial institutions in 2025

renminbi has become dominant in credit growth since 2022

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 11:39:29 +0000

renminbi has become dominant in credit growth since 2022

a move from US dollar & Euro denominated credit to Chinese Yuan-denominated credit

USD cross-border bank credit grew by $800 billion in Q1 2025

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 11:42:34 +0000

USD cross-border bank credit grew by $800 billion in Q1 2025

expect further increases for Q2 2025, due to the weak US dollar

credit continues to expand in the non-financial sector as well

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 11:44:35 +0000

credit continues to expand in the non-financial sector as well

the attached graph also shows a turning point in 2008 - that's how the GFC was handled - by issuing more credit 😁

you can also see a steeper increase during COVID

it's not just the governments and financial institutions who are dependent on debt refinancing -…

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 11:44:57 +0000

it's not just the governments and financial institutions who are dependent on debt refinancing - the private non-financial sector as well

remember than more than 70% of credit issuance is for servicing/refinancing of existing debt

📖 Quoted from 2025-08-16 12:44
https://illya.sh/thoughts/credit-continues-to-expand-in-the-non-financial-sector-as
credit continues to expand in the non-financial sector as well

the attached graph also shows a turning point in 2008 - that's how the GFC was handled - by issuing more credit 😁

you can also see a steeper increase during COVID

i wrote a thread explaining why weaker USD means more credit/loans issued in USD, thus driving up…

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 12:01:21 +0000

i wrote a thread explaining why weaker USD means more credit/loans issued in USD, thus driving up global liquidity

you can read it here: https://illya.sh/threads/@1755216337-1.html

📖 Quoted from 2025-08-16 12:42
https://illya.sh/thoughts/usd-cross-border-bank-credit-grew-by-800-billion-in-q1-2025
USD cross-border bank credit grew by $800 billion in Q1 2025

expect further increases for Q2 2025, due to the weak US dollar

Bank of International Settlements (BIS) has a lot of interesting papers, articles and data on…

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 14:28:15 +0000

Bank of International Settlements (BIS) has a lot of interesting papers, articles and data on global liquidity and financial system

it's bank-focused, but connected to the broader scope, like the non-bank financial institution (NBFI) credit flows i posted about earlier

stablecoin inflows lower 3M Treasury bill yields, while outflows raise yields by a larger amount

hello@illya.sh (Illya Gerasymchuk) — Sat, 16 Aug 2025 21:14:00 +0000

stablecoin inflows lower 3M Treasury bill yields, while outflows raise yields by a larger amount

LP-IV estimates:
⏩ $3.5B inflows lower yields by ≈3 bp
⏪ $3.5B outflows raise the yields by ≈8 bp

inflow = mint
outflow = redemption/burn

this is because a stablecoin mint/creation on-chain is the proxy for a T-bill purchase by the…

hello@illya.sh (Illya Gerasymchuk) — Sun, 17 Aug 2025 14:34:01 +0000

this is because a stablecoin mint/creation on-chain is the proxy for a T-bill purchase by the company issuing that stablecoin (e.g. Circle, Tether)

so stablecoin inflows proxy T-bill purchases, which raises their price and lowers the yield

📖 Quoted from 2025-08-16 22:14
https://illya.sh/thoughts/stablecoin-inflows-lower-3m-treasury-bill-yields-while
stablecoin inflows lower 3M Treasury bill yields, while outflows raise yields by a larger amount

LP-IV estimates:
⏩ $3.5B inflows lower yields by ≈3 bp
⏪ $3.5B outflows raise the yields by ≈8 bp

inflow = mint
outflow = redemption/burn

stablecoin outflows proxy T-bill sales or reduced rolling

hello@illya.sh (Illya Gerasymchuk) — Sun, 17 Aug 2025 15:05:39 +0000

stablecoin outflows proxy T-bill sales or reduced rolling

redemption/burn requires the stablecoin issuer to sell NOW, so large volumes means dealers/market makers will require a yield concession to warehouse those T-bills, as they are subject to balance sheet constraints

📖 Quoted from 2025-08-17 15:34
https://illya.sh/thoughts/this-is-because-a-stablecoin-mint-creation-on-chain-is-the
this is because a stablecoin mint/creation on-chain is the proxy for a T-bill purchase by the company issuing that stablecoin (e.g. Circle, Tether)

so stablecoin inflows proxy T-bill purchases, which raises their price and lowers the yield

essentially many T-bill sales flood the market at once, so their price falls, thus causing a yield…

hello@illya.sh (Illya Gerasymchuk) — Sun, 17 Aug 2025 15:14:32 +0000

essentially many T-bill sales flood the market at once, so their price falls, thus causing a yield increase

selling T-bills is more urgent than buying - the stablecoin issuer cannot split it across auctions & dealers as easily, so the market yield change is larger on outflows

📖 Quoted from 2025-08-17 16:05
https://illya.sh/thoughts/stablecoin-outflows-proxy-t-bill-sales-or-reduced-rolling
stablecoin outflows proxy T-bill sales or reduced rolling

redemption/burn requires the stablecoin issuer to sell NOW, so large volumes means dealers/market makers will require a yield concession to warehouse those T-bills, as they are subject to balance sheet constraints

market makers and other dealers are also subject to regulatory balance sheet constraints

hello@illya.sh (Illya Gerasymchuk) — Sun, 17 Aug 2025 15:42:44 +0000

market makers and other dealers are also subject to regulatory balance sheet constraints

many of them are banks, so frameworks like Basel III apply. non-bank dealers have similar regulations

this means dealers are also subject to HQLA, haircuts, leverage limits and alike

bank dealers are subject to Basel III, non-bank dealers to other similar regulations

hello@illya.sh (Illya Gerasymchuk) — Sun, 17 Aug 2025 15:52:25 +0000

bank dealers are subject to Basel III, non-bank dealers to other similar regulations

non-bank dealers don't have HQLA or leverage ratio (Basel), but they have net capital haircuts and other leverage/margin requirements

so all dealers are subject to a similar set of regulations

📖 Quoted from 2025-08-17 16:42
https://illya.sh/thoughts/market-makers-and-other-dealers-are-also-subject-to
market makers and other dealers are also subject to regulatory balance sheet constraints

many of them are banks, so frameworks like Basel III apply. non-bank dealers have similar regulations

this means dealers are also subject to HQLA, haircuts, leverage limits and alike

since all dealers are subject to functionally similar regulatory constraints, they're also subject…

hello@illya.sh (Illya Gerasymchuk) — Sun, 17 Aug 2025 15:56:29 +0000

since all dealers are subject to functionally similar regulatory constraints, they're also subject to functionally similar set of balance sheet constraints

this is important to remember in the context of global liquidity, especially in terms of pro-cyclical effects

📖 Quoted from 2025-08-17 16:52
https://illya.sh/thoughts/bank-dealers-are-subject-to-basel-iii-non-bank-dealers-to
bank dealers are subject to Basel III, non-bank dealers to other similar regulations

non-bank dealers don't have HQLA or leverage ratio (Basel), but they have net capital haircuts and other leverage/margin requirements

so all dealers are subject to a similar set of regulations

these regulatory constraints are synchronized to a significant degree across all jurisdictions

hello@illya.sh (Illya Gerasymchuk) — Sun, 17 Aug 2025 16:26:19 +0000

these regulatory constraints are synchronized to a significant degree across all jurisdictions

this means that the financial regulations in EU & USA will have an analogous functional effect (although not the same!). so you can expect similar frameworks across several countries

📖 Quoted from 2025-08-17 16:56
https://illya.sh/thoughts/since-all-dealers-are-subject-to-functionally-similar
since all dealers are subject to functionally similar regulatory constraints, they're also subject to functionally similar set of balance sheet constraints

this is important to remember in the context of global liquidity, especially in terms of pro-cyclical effects

it's totally okay to use exceptions for error handling

hello@illya.sh (Illya Gerasymchuk) — Mon, 18 Aug 2025 19:04:14 +0000

it's totally okay to use exceptions for error handling

it depends on how you're using abstractions. e.g. EAFP in Python

there are very few dogmas in software engineering - as the best architecture always depends on the operating context, environment and constraints

yield spreads between US Treasuries and riskier bonds mirror the price of Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Mon, 18 Aug 2025 20:04:09 +0000

yield spreads between US Treasuries and riskier bonds mirror the price of Bitcoin

in practice, there is a correlation between them:

📈 yield spreads up = ⬇️ BTC down
📉 yield spreads down = ⬆️ BTC up

why? because those spreads are proxy for market's risk appetite

yield spread between a safe asset and a riskier one is an expression of the required return per…

hello@illya.sh (Illya Gerasymchuk) — Mon, 18 Aug 2025 20:07:48 +0000

yield spread between a safe asset and a riskier one is an expression of the required return per unit of risk

higher yield spreads, means risker bonds are significantly cheaper than US Treasury bonds, thus the market is valuing safe assets with a premium - a "risk-off" signal

📖 Quoted from 2025-08-18 21:04
https://illya.sh/thoughts/yield-spreads-between-us-treasuries-and-riskier-bonds-mirror
yield spreads between US Treasuries and riskier bonds mirror the price of Bitcoin

in practice, there is a correlation between them:

📈 yield spreads up = ⬇️ BTC down
📉 yield spreads down = ⬆️ BTC up

why? because those spreads are proxy for market's risk appetite

a lower yield spread means that the market requires less return per unit of risk

hello@illya.sh (Illya Gerasymchuk) — Mon, 18 Aug 2025 20:09:56 +0000

a lower yield spread means that the market requires less return per unit of risk

lower yield spreads means that US Treasuries have a small premium over riskier bonds, thus the market is attributing a smaller premium to safe assets - a "risk-on" signal

📖 Quoted from 2025-08-18 21:07
https://illya.sh/thoughts/yield-spread-between-a-safe-asset-and-a-riskier-one-is-an
yield spread between a safe asset and a riskier one is an expression of the required return per unit of risk

higher yield spreads, means risker bonds are significantly cheaper than US Treasury bonds, thus the market is valuing safe assets with a premium - a "risk-off" signal

thus, you interpret yield spreads between US Treasuries and riskier bonds as:

hello@illya.sh (Illya Gerasymchuk) — Mon, 18 Aug 2025 20:12:27 +0000

thus, you interpret yield spreads between US Treasuries and riskier bonds as:

📈 increasing/high yield spread = risk-off
📉 lowering/low yield spread = risk-on

📖 Quoted from 2025-08-18 21:09
https://illya.sh/thoughts/a-lower-yield-spread-means-that-the-market-requires-less
a lower yield spread means that the market requires less return per unit of risk

lower yield spreads means that US Treasuries have a small premium over riskier bonds, thus the market is attributing a smaller premium to safe assets - a "risk-on" signal

if you overlay Bitcoin's price history over those yield spreads, you will notice a significant…

hello@illya.sh (Illya Gerasymchuk) — Mon, 18 Aug 2025 20:14:38 +0000

if you overlay Bitcoin's price history over those yield spreads, you will notice a significant level of correlation

⬆️ Bitcoin appreciates when spreads are lowering and/or low

⬇️ Bitcoin depreciates when spreads are increasing and/or high

makes sense - Bitcoin is a risk asset

📖 Quoted from 2025-08-18 21:12
https://illya.sh/thoughts/thus-you-interpret-yield-spreads-between-us-treasuries-and
thus, you interpret yield spreads between US Treasuries and riskier bonds as:

📈 increasing/high yield spread = risk-off
📉 lowering/low yield spread = risk-on

so when market signals a higher risk appetite - Bitcoin tends to see inflows

hello@illya.sh (Illya Gerasymchuk) — Mon, 18 Aug 2025 20:20:17 +0000

so when market signals a higher risk appetite - Bitcoin tends to see inflows

when market is more risk-averse - bitcoin tends to see outflows, alongside other risk assets

you can use the US Treasury/riskier bonds yield spreads to understand BTC's trend direction. it's an alpha

📖 Quoted from 2025-08-18 21:14
https://illya.sh/thoughts/if-you-overlay-bitcoins-price-history-over-those-yield
if you overlay Bitcoin's price history over those yield spreads, you will notice a significant level of correlation

⬆️ Bitcoin appreciates when spreads are lowering and/or low

⬇️ Bitcoin depreciates when spreads are increasing and/or high

makes sense - Bitcoin is a risk asset

stablecoins are good for short-term interest rates

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 07:01:07 +0000

stablecoins are good for short-term interest rates

i wrote a thread explaining why

📖 read it here: https://illya.sh/threads/@1755378840-1.html

there should be more blockchains running over mesh technologies like LoRA

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 07:52:09 +0000

there should be more blockchains running over mesh technologies like LoRA

this way you can keep the consensus and payments running even when internet is down

polynomial commitments (ZK) can be used to store-and-forward transactions

you can use something like meshtastic to easily setup a network of end nodes and relays

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 07:52:40 +0000

you can use something like meshtastic to easily setup a network of end nodes and relays

this also enables additional use-cases, like verifiable geolocation/proximity, and locale-restricted access

📖 Quoted from 2025-08-19 08:52
https://illya.sh/thoughts/there-should-be-more-blockchains-running-over-mesh
there should be more blockchains running over mesh technologies like LoRA

this way you can keep the consensus and payments running even when internet is down

polynomial commitments (ZK) can be used to store-and-forward transactions

electromagnetic waves propagate at a ≈constant speed (speed of light), which means that you can…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 07:54:06 +0000

electromagnetic waves propagate at a ≈constant speed (speed of light), which means that you can estimate the distance between two communicating end nodes, or between a node and a relay

similar approaches are used mitigate against range extender attacks for remote car unlocking

📖 Quoted from 2025-08-19 08:52
https://illya.sh/thoughts/you-can-use-something-like-meshtastic-to-easily-setup-a
you can use something like meshtastic to easily setup a network of end nodes and relays

this also enables additional use-cases, like verifiable geolocation/proximity, and locale-restricted access

i just ran across meshtastic now, so cannot attest to the feasibility of implementing LoRA…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 07:54:57 +0000

i just ran across meshtastic now, so cannot attest to the feasibility of implementing LoRA networks with it - but from the documentation it looks straightforward

you can even write your code in Python! 🐍

📖 Quoted from 2025-08-19 08:54
https://illya.sh/thoughts/electromagnetic-waves-propagate-at-a-constant-speed-speed-of
electromagnetic waves propagate at a ≈constant speed (speed of light), which means that you can estimate the distance between two communicating end nodes, or between a node and a relay

similar approaches are used mitigate against range extender attacks for remote car unlocking

here's what yield spreads are saying about Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 09:25:43 +0000

here's what yield spreads are saying about Bitcoin

≈3-3.40 is an important historical band which served as support bottom several times, including during COVID, and partly during the 2008 GFC

so far it looks like a trend-reversal in the short-term, with the spreads heading up

the yield spreads may also start an almost vertical uptrend on a monthly timescale - this usually…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 09:28:11 +0000

the yield spreads may also start an almost vertical uptrend on a monthly timescale - this usually means a financial crisis to some degree

that's probably not happening in the next 3 months though, as you can expect Federal Reserve to decrease interest rates and/or employ QE

📖 Quoted from 2025-08-19 10:25
https://illya.sh/thoughts/heres-what-yield-spreads-are-saying-about-bitcoin
here's what yield spreads are saying about Bitcoin

≈3-3.40 is an important historical band which served as support bottom several times, including during COVID, and partly during the 2008 GFC

so far it looks like a trend-reversal in the short-term, with the spreads heading up

in the short-term, lower rates and/or QE means easier funding conditions, so more positions will…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 09:30:02 +0000

in the short-term, lower rates and/or QE means easier funding conditions, so more positions will get to be refinanced

📖 Quoted from 2025-08-19 10:28
https://illya.sh/thoughts/the-yield-spreads-may-also-start-an-almost-vertical-uptrend
the yield spreads may also start an almost vertical uptrend on a monthly timescale - this usually means a financial crisis to some degree

that's probably not happening in the next 3 months though, as you can expect Federal Reserve to decrease interest rates and/or employ QE

however, eventually yield spreads will raise with high velocity. this is the larger financial…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 09:30:37 +0000

however, eventually yield spreads will raise with high velocity. this is the larger financial crisis part of the cycle. there you will also see lower rates and more QE

📖 Quoted from 2025-08-19 10:30
https://illya.sh/thoughts/in-the-short-term-lower-rates-and-or-qe-means-easier-funding
in the short-term, lower rates and/or QE means easier funding conditions, so more positions will get to be refinanced

QE also removes safe collateral from the market, mainly US Treasury bills, notes and bonds. this…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 09:36:53 +0000

QE also removes safe collateral from the market, mainly US Treasury bills, notes and bonds. this safe collateral is the backbone of wholesale debt markets, where financial institutions, including commercial and central banks finance and re-finance their positions

📖 Quoted from 2025-08-19 10:30
https://illya.sh/thoughts/however-eventually-yield-spreads-will-raise-with-high
however, eventually yield spreads will raise with high velocity. this is the larger financial crisis part of the cycle. there you will also see lower rates and more QE

the global financial system depends on the abundance of this collateral, otherwise - defaults,…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 09:40:44 +0000

the global financial system depends on the abundance of this collateral, otherwise - defaults, margin calls, etc

i wrote a thread/article explaining how US Treasuries are the dominant collateral in short-term wholesale debt markets (e.g. repo). read here: https://illya.sh/threads/@1751726431-1.html

📖 Quoted from 2025-08-19 10:36
https://illya.sh/thoughts/qe-also-removes-safe-collateral-from-the-market-mainly-us
QE also removes safe collateral from the market, mainly US Treasury bills, notes and bonds. this safe collateral is the backbone of wholesale debt markets, where financial institutions, including commercial and central banks finance and re-finance their positions

the US Treasury may also issue more debt to increase the supply of safe assets, thus offsetting…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 09:44:07 +0000

the US Treasury may also issue more debt to increase the supply of safe assets, thus offsetting the compression shock

end result: more safe assets/prime collateral provided to markets. remember that the newly issued treasuries are likely to be rehypothecated several times

📖 Quoted from 2025-08-19 10:40
https://illya.sh/thoughts/the-global-financial-system-depends-on-the-abundance-of-this
the global financial system depends on the abundance of this collateral, otherwise - defaults, margin calls, etc

i wrote a thread/article explaining how US Treasuries are the dominant collateral in short-term wholesale debt markets (e.g. repo). read here: https://illya.sh/threads/@1751726431-1.html

initially QE may only increase base money supply - as commercial banks reserve balances get…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 09:58:07 +0000

initially QE may only increase base money supply - as commercial banks reserve balances get credited by the Central Bank

if the Central Bank purchases assets from non-bank financial institutions, then broad money increases directly as well, as deposits increase

📖 Quoted from 2025-08-19 10:44
https://illya.sh/thoughts/the-us-treasury-may-also-issue-more-debt-to-increase-the
the US Treasury may also issue more debt to increase the supply of safe assets, thus offsetting the compression shock

end result: more safe assets/prime collateral provided to markets. remember that the newly issued treasuries are likely to be rehypothecated several times

even if it doesn't happen directly at the start - eventually QE also increases broad money, due to…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 10:11:00 +0000

even if it doesn't happen directly at the start - eventually QE also increases broad money, due to reduced balance sheet constraints and an increase in cash reserves, which needs to be invested ASAP. this leads to more lending and asset purchases

📖 Quoted from 2025-08-19 10:58
https://illya.sh/thoughts/initially-qe-may-only-increase-base-money-supply-as
initially QE may only increase base money supply - as commercial banks reserve balances get credited by the Central Bank

if the Central Bank purchases assets from non-bank financial institutions, then broad money increases directly as well, as deposits increase

US Treasury debt is likely to be among the assets purchased by those same banks that received QE…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 10:14:38 +0000

US Treasury debt is likely to be among the assets purchased by those same banks that received QE funds from the central bank. so central bank's QE injection may be used to purchase US Treasury debt at auctions, thus effectively monetizing the government debt 😁

📖 Quoted from 2025-08-19 11:11
https://illya.sh/thoughts/even-if-it-doesnt-happen-directly-at-the-start-eventually-qe
even if it doesn't happen directly at the start - eventually QE also increases broad money, due to reduced balance sheet constraints and an increase in cash reserves, which needs to be invested ASAP. this leads to more lending and asset purchases

eventually this carry trade unwinds, and yield spreads soar. balance sheet constrains, existing…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 10:17:33 +0000

eventually this carry trade unwinds, and yield spreads soar. balance sheet constrains, existing positions get too expensive too roll-over/re-finance that’s where you get the big(er) financial crisis

and then you get more QE/lower rates to address that

📖 Quoted from 2025-08-19 11:14
https://illya.sh/thoughts/us-treasury-debt-is-likely-to-be-among-the-assets-purchased
US Treasury debt is likely to be among the assets purchased by those same banks that received QE funds from the central bank. so central bank's QE injection may be used to purchase US Treasury debt at auctions, thus effectively monetizing the government debt 😁

cryptocurrency prices perform well when yield spreads are low/decreasing and bad when yield…

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 10:18:29 +0000

cryptocurrency prices perform well when yield spreads are low/decreasing and bad when yield spreads are high/increasing

this is specifically true when you analyze it at a higher timeframe - think monthly timescale instead of daily one. and the larger the spike/change

📖 Quoted from 2025-08-19 11:17
https://illya.sh/thoughts/eventually-this-carry-trade-unwinds-and-yield-spreads-soar
eventually this carry trade unwinds, and yield spreads soar. balance sheet constrains, existing positions get too expensive too roll-over/re-finance that’s where you get the big(er) financial crisis

and then you get more QE/lower rates to address that

it's NOT the top yet - i'll post a thread with an explanation soon

hello@illya.sh (Illya Gerasymchuk) — Tue, 19 Aug 2025 19:56:52 +0000

it's NOT the top yet - i'll post a thread with an explanation soon

stay tuned 👀

it's NOT yet the top of the cycle for equities, cryptocurrencies and other risk assets. here’s why

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:29:41 +0000

it's NOT yet the top of the cycle for equities, cryptocurrencies and other risk assets. here’s why

1️⃣ US Treasury is issuing more debt

2️⃣ in the next months I expect the Fed to cut rates and/or introduce some form of QE

3️⃣ weaker USD means more cross-border USD credit

a lot of these US treasury purchases will be financed with short-term rolling debt (e.g. repo)

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:33:20 +0000

a lot of these US treasury purchases will be financed with short-term rolling debt (e.g. repo)

the newly issued Treasuries themselves will be used as collateral to borrow cash, many times over via rehypothecation

📖 Quoted from 2025-08-20 20:29
https://illya.sh/thoughts/its-not-yet-the-top-of-the-cycle-for-equities
it's NOT yet the top of the cycle for equities, cryptocurrencies and other risk assets. here’s why

1️⃣ US Treasury is issuing more debt

2️⃣ in the next months I expect the Fed to cut rates and/or introduce some form of QE

3️⃣ weaker USD means more cross-border USD credit

once Fed cuts interest rates, more borrowing will occur, thus expanding broad money

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:34:38 +0000

once Fed cuts interest rates, more borrowing will occur, thus expanding broad money

it will also lower T-bill yields short-term, as the prices are bid up due to a lower risk-free rate

📖 Quoted from 2025-08-20 20:33
https://illya.sh/thoughts/a-lot-of-these-us-treasury-purchases-will-be-financed-with
a lot of these US treasury purchases will be financed with short-term rolling debt (e.g. repo)

the newly issued Treasuries themselves will be used as collateral to borrow cash, many times over via rehypothecation

once Fed does QE, reserve account balances increase, thus directly increasing base money

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:35:01 +0000

once Fed does QE, reserve account balances increase, thus directly increasing base money

broad money either increases indirectly or directly if the Fed credits a non-bank institution

📖 Quoted from 2025-08-20 20:34
https://illya.sh/thoughts/once-fed-cuts-interest-rates-more-borrowing-will-occur-thus
once Fed cuts interest rates, more borrowing will occur, thus expanding broad money

it will also lower T-bill yields short-term, as the prices are bid up due to a lower risk-free rate

i covered more this aspect of QE in my thread about how to use yield spreads to reason about…

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:35:28 +0000

i covered more this aspect of QE in my thread about how to use yield spreads to reason about future Bitcoin price and cycles

you can read it here: https://illya.sh/threads/@1755595543-1.html

📖 Quoted from 2025-08-20 20:35
https://illya.sh/thoughts/once-fed-does-qe-reserve-account-balances-increase-thus
once Fed does QE, reserve account balances increase, thus directly increasing base money

broad money either increases indirectly or directly if the Fed credits a non-bank institution

weaker USD, means appreciation of FX currencies and since many cross-border bank loans are…

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:35:47 +0000

weaker USD, means appreciation of FX currencies and since many cross-border bank loans are collateralized with a local currency - solvency ratios improve, thus increasing balance sheet capacity for more USD credit

this means an increase in broad money

📖 Quoted from 2025-08-20 20:35
https://illya.sh/thoughts/i-covered-more-this-aspect-of-qe-in-my-thread-about-how-to
i covered more this aspect of QE in my thread about how to use yield spreads to reason about future Bitcoin price and cycles

you can read it here: https://illya.sh/threads/@1755595543-1.html

i explained how weaker US dollar increases cross-border USD liquidity in this thread:…

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:35:57 +0000

i explained how weaker US dollar increases cross-border USD liquidity in this thread: https://illya.sh/threads/@1755216337-1.html

📖 Quoted from 2025-08-20 20:35
https://illya.sh/thoughts/weaker-usd-means-appreciation-of-fx-currencies-and-since
weaker USD, means appreciation of FX currencies and since many cross-border bank loans are collateralized with a local currency - solvency ratios improve, thus increasing balance sheet capacity for more USD credit

this means an increase in broad money

in conjunction, this creates an upward pressure in the global liquidity for the near future

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:36:11 +0000

in conjunction, this creates an upward pressure in the global liquidity for the near future

of course, this also builds up on leverage in the form of market-wide carry trades, and duration mismatching in the form of rolling over of debt by the Treasury

📖 Quoted from 2025-08-20 20:35
https://illya.sh/thoughts/i-explained-how-weaker-us-dollar-increases-cross-border-usd
i explained how weaker US dollar increases cross-border USD liquidity in this thread: https://illya.sh/threads/@1755216337-1.html

eventually, the carry will unwind and debt needs to be refinanced

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:36:50 +0000

eventually, the carry will unwind and debt needs to be refinanced

more QE-like measures will be taken, but eventually it won't be enough to prevent deleveraging/burst. this means defaults, margin calls, etc. the latter will likely be addressed by another form of QE

📖 Quoted from 2025-08-20 20:36
https://illya.sh/thoughts/in-conjunction-this-creates-an-upward-pressure-in-the-global
in conjunction, this creates an upward pressure in the global liquidity for the near future

of course, this also builds up on leverage in the form of market-wide carry trades, and duration mismatching in the form of rolling over of debt by the Treasury

still, at some point QE's won't be able to prevent a prolonged negative impact on the market - the…

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:42:58 +0000

still, at some point QE's won't be able to prevent a prolonged negative impact on the market - the top of the cycle or close to it

we're not there yet

📖 Quoted from 2025-08-20 20:36
https://illya.sh/thoughts/eventually-the-carry-will-unwind-and-debt-needs-to-be
eventually, the carry will unwind and debt needs to be refinanced

more QE-like measures will be taken, but eventually it won't be enough to prevent deleveraging/burst. this means defaults, margin calls, etc. the latter will likely be addressed by another form of QE

the next burst in global liquidity/larger financial crisis will only happen after several more…

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:43:43 +0000

the next burst in global liquidity/larger financial crisis will only happen after several more rounds of QE

the next round of QE is close, but hasn’t even started yet and rates were not cut. however, the next big debt refinancing is underway

📖 Quoted from 2025-08-20 20:42
https://illya.sh/thoughts/still-at-some-point-qes-wont-be-able-to-prevent-a-prolonged
still, at some point QE's won't be able to prevent a prolonged negative impact on the market - the top of the cycle or close to it

we're not there yet

the specific QE policies will vary, but it will probably include an MBS-style QE like in QE1 2008.…

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:43:57 +0000

the specific QE policies will vary, but it will probably include an MBS-style QE like in QE1 2008. this will lower mortgage rates short-term

I explained why in this thread: https://illya.sh/threads/@1754148538-1.html

📖 Quoted from 2025-08-20 20:43
https://illya.sh/thoughts/the-next-burst-in-global-liquidity-larger-financial-crisis
the next burst in global liquidity/larger financial crisis will only happen after several more rounds of QE

the next round of QE is close, but hasn’t even started yet and rates were not cut. however, the next big debt refinancing is underway

🇨🇳 China is considering Yuan-backed stablecoins, which will lower short-term CGB yields

hello@illya.sh (Illya Gerasymchuk) — Wed, 20 Aug 2025 19:54:21 +0000

🇨🇳 China is considering Yuan-backed stablecoins, which will lower short-term CGB yields

that's assuming the stablecoin issuers will proxy short-term government bonds, like in the US

i wrote a thread explaining that. you can read it here: https://illya.sh/threads/@1755378840-1.html

most of auctioned Treasury bills in 2025 are bought domestically

hello@illya.sh (Illya Gerasymchuk) — Thu, 21 Aug 2025 11:57:39 +0000

most of auctioned Treasury bills in 2025 are bought domestically

foreign investors are net sellers, so the new T-bill supply is being absorbed by US-based institutions

so most of short-term US debt is being absorbed by the US economy and not by foreign investors

when a bank buys an asset from a non-bank it creates broad money

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 11:43:38 +0000

when a bank buys an asset from a non-bank it creates broad money

if a commercial bank buys a US Treasury bill from you, it will pay you by create a new deposit into your account

so effectively the bank pays you by creating new digital currency and crediting it into your account

the bank doesn't need to have the money to pay you for the T-bill, as that money will be created…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:03:45 +0000

the bank doesn't need to have the money to pay you for the T-bill, as that money will be created and deposited into your account

on the bank's sheet side it works: its assets and liabilities increase in the same amount

📖 Quoted from 2025-08-22 12:43
https://illya.sh/thoughts/when-a-bank-buys-an-asset-from-a-non-bank-it-creates-broad
when a bank buys an asset from a non-bank it creates broad money

if a commercial bank buys a US Treasury bill from you, it will pay you by create a new deposit into your account

so effectively the bank pays you by creating new digital currency and crediting it into your account

here, the bank's assets increase by the value of the T-bill and liabilities increase by the amount…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:04:04 +0000

here, the bank's assets increase by the value of the T-bill and liabilities increase by the amount that they paid you for it. in the balance sheet the T-bill will have the same value as what the bank paid you/deposited into your account

📖 Quoted from 2025-08-22 13:03
https://illya.sh/thoughts/the-bank-doesnt-need-to-have-the-money-to-pay-you-for-the-t
the bank doesn't need to have the money to pay you for the T-bill, as that money will be created and deposited into your account

on the bank's sheet side it works: its assets and liabilities increase in the same amount

let's say the bank bought a T-bill from you for $1000. for this, they "created $1000" and…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:06:24 +0000

let's say the bank bought a T-bill from you for $1000. for this, they "created $1000" and deposited them into your account. bank’s balance sheet:

➖ Assets: +$1000 (the T-bill)
➖ Liabilities: +$1000 (the deposit/payment to you)

the key here is that you are a NON-bank

📖 Quoted from 2025-08-22 13:04
https://illya.sh/thoughts/here-the-banks-assets-increase-by-the-value-of-the-t-bill
here, the bank's assets increase by the value of the T-bill and liabilities increase by the amount that they paid you for it. in the balance sheet the T-bill will have the same value as what the bank paid you/deposited into your account

when banks buy assets from other banks - new deposits do not get created, as the payment happens…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:06:53 +0000

when banks buy assets from other banks - new deposits do not get created, as the payment happens by moving funds between the commercial bank's reserve accounts at the central bank

thus, it's base money movements/reallocation, not creation

📖 Quoted from 2025-08-22 13:06
https://illya.sh/thoughts/lets-say-the-bank-bought-a-t-bill-from-you-for-1000-for-this
let's say the bank bought a T-bill from you for $1000. for this, they "created $1000" and deposited them into your account. bank’s balance sheet:

➖ Assets: +$1000 (the T-bill)
➖ Liabilities: +$1000 (the deposit/payment to you)

the key here is that you are a NON-bank

if it's the central bank buying assets from other banks, such as in QE - then the central bank…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:08:04 +0000

if it's the central bank buying assets from other banks, such as in QE - then the central bank also creates the deposit "out of thin air", thus effectively paying for the assets to the commercial bank with a newly created deposit into their reserve account. base money increases

📖 Quoted from 2025-08-22 13:06
https://illya.sh/thoughts/when-banks-buy-assets-from-other-banks-new-deposits-do-not
when banks buy assets from other banks - new deposits do not get created, as the payment happens by moving funds between the commercial bank's reserve accounts at the central bank

thus, it's base money movements/reallocation, not creation

also note that it's not just commercial banks that have accounts at the central bank. it varies by…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:08:20 +0000

also note that it's not just commercial banks that have accounts at the central bank. it varies by jurisdiction, but other entities also have accounts at the central bank

for example, in the US the Treasury has an account at the Fed - the Treasury General Account (TGA)

📖 Quoted from 2025-08-22 13:08
https://illya.sh/thoughts/if-its-the-central-bank-buying-assets-from-other-banks-such
if it's the central bank buying assets from other banks, such as in QE - then the central bank also creates the deposit "out of thin air", thus effectively paying for the assets to the commercial bank with a newly created deposit into their reserve account. base money increases

reserve accounts at the central bank are important to understand the mechanics of how asset…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:18:21 +0000

reserve accounts at the central bank are important to understand the mechanics of how asset purchase happens. generally speaking, if an institution has an account at the central bank - reserve or other deposit account, they will use it whenever possible to settle payment

📖 Quoted from 2025-08-22 13:08
https://illya.sh/thoughts/also-note-that-its-not-just-commercial-banks-that-have
also note that it's not just commercial banks that have accounts at the central bank. it varies by jurisdiction, but other entities also have accounts at the central bank

for example, in the US the Treasury has an account at the Fed - the Treasury General Account (TGA)

effectively this means that if both parties involved in the transaction have an account at the…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:19:24 +0000

effectively this means that if both parties involved in the transaction have an account at the central bank, they will will use it to settle payments

📖 Quoted from 2025-08-22 13:18
https://illya.sh/thoughts/reserve-accounts-at-the-central-bank-are-important-to
reserve accounts at the central bank are important to understand the mechanics of how asset purchase happens. generally speaking, if an institution has an account at the central bank - reserve or other deposit account, they will use it whenever possible to settle payment

generally speaking:

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:25:24 +0000

generally speaking:

➖ transaction between central bank accounts = base money reallocated, decreased or increased

➖ transaction between non-central bank accounts = broad money reallocated, decreased or increased

📖 Quoted from 2025-08-22 13:19
https://illya.sh/thoughts/effectively-this-means-that-if-both-parties-involved-in-the
effectively this means that if both parties involved in the transaction have an account at the central bank, they will will use it to settle payments

this is also why commercial banks purchasing government debt securities, such as Treasury bills…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:27:09 +0000

this is also why commercial banks purchasing government debt securities, such as Treasury bills may be effectively monetizing that debt

📖 Quoted from 2025-08-22 13:25
https://illya.sh/thoughts/generally-speaking
generally speaking:

➖ transaction between central bank accounts = base money reallocated, decreased or increased

➖ transaction between non-central bank accounts = broad money reallocated, decreased or increased

repo rates increase and borrowing decreases in quarter-ends

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:51:44 +0000

repo rates increase and borrowing decreases in quarter-ends

this includes the upcoming month of September. in addition, September 15th the corporate tax limit in the US

this reduces global liquidity, so asset prices tend to fall

this is one of the reasons why September is historically a bad month for Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:58:01 +0000

this is one of the reasons why September is historically a bad month for Bitcoin

📖 Quoted from 2025-08-22 13:51
https://illya.sh/thoughts/repo-rates-increase-and-borrowing-decreases-in-quarter-ends
repo rates increase and borrowing decreases in quarter-ends

this includes the upcoming month of September. in addition, September 15th the corporate tax limit in the US

this reduces global liquidity, so asset prices tend to fall

moreover, currently the US Treasury is issuing debt and cash at ON RRP is running low. MMF,…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 12:58:15 +0000

moreover, currently the US Treasury is issuing debt and cash at ON RRP is running low. MMF, dealers and banks purchase those T-bills. if they do not have cash in ON RRP, it will be financed by outflows from bank reserve accounts into TGA

📖 Quoted from 2025-08-22 13:58
https://illya.sh/thoughts/this-is-one-of-the-reasons-why-september-is-historically-a
this is one of the reasons why September is historically a bad month for Bitcoin

the funding could also come from Fed’s facilities, like the SRF or OMO

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 13:02:34 +0000

the funding could also come from Fed’s facilities, like the SRF or OMO

however, current SRF rate is 4.5%, which is above the yield on T-bills, and Fed is still officially in QT, so no large-scale, longer-term liquidity injections via open market operations

📖 Quoted from 2025-08-22 13:58
https://illya.sh/thoughts/moreover-currently-the-us-treasury-is-issuing-debt-and-cash
moreover, currently the US Treasury is issuing debt and cash at ON RRP is running low. MMF, dealers and banks purchase those T-bills. if they do not have cash in ON RRP, it will be financed by outflows from bank reserve accounts into TGA

Standing Repo Facility (SRF) is a policy rate set by the Fed, according to the target rate. so…

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 13:04:19 +0000

Standing Repo Facility (SRF) is a policy rate set by the Fed, according to the target rate. so unless the target rate is decreased, SRF rate is unlikely to be reduced

this situation is putting pressure on the Fed to decrease interest rates and start QE soon

📖 Quoted from 2025-08-22 14:02
https://illya.sh/thoughts/the-funding-could-also-come-from-feds-facilities-like-the
the funding could also come from Fed’s facilities, like the SRF or OMO

however, current SRF rate is 4.5%, which is above the yield on T-bills, and Fed is still officially in QT, so no large-scale, longer-term liquidity injections via open market operations

quick update on gold:

hello@illya.sh (Illya Gerasymchuk) — Fri, 22 Aug 2025 17:21:15 +0000

quick update on gold:

everything according to the plan - the thesis remains valid. now just wait and let the price action unfold 😄

use these trend lines as a guide

📖 Quoted from 2025-08-08 19:53
https://illya.sh/thoughts/gold-tariffs-put-further-upside-pressure-for-gold-towards-a
gold tariffs put further upside pressure for gold towards a new all time high on spot

this is in addition to the global monetary, geopolitical and fiscal positive price pressures

a significant part of the markets will be closed for the weekend. there could be a gap on reopen

TGA fluctuations must be offset by another asset or liability from Fed's balance sheet

hello@illya.sh (Illya Gerasymchuk) — Sat, 23 Aug 2025 12:47:30 +0000

TGA fluctuations must be offset by another asset or liability from Fed's balance sheet

⬆️ TGA increase = liability down or asset up
⬇️ TGA decrease = liability up or asset down

found this balance sheet model in Fed's notes, and it's a good visual aid to this thread

📖 Quoted from 2025-08-22 14:04
https://illya.sh/thoughts/standing-repo-facility-srf-is-a-policy-rate-set-by-the-fed
Standing Repo Facility (SRF) is a policy rate set by the Fed, according to the target rate. so unless the target rate is decreased, SRF rate is unlikely to be reduced

this situation is putting pressure on the Fed to decrease interest rates and start QE soon

finance has A LOT to learn from engineering - especially in terms or standardization 😭

hello@illya.sh (Illya Gerasymchuk) — Sun, 24 Aug 2025 12:53:13 +0000

finance has A LOT to learn from engineering - especially in terms or standardization 😭

e.g. you're reading a british author, you may find "high street banks". it makes you think that there are also low street banks, or at least middle street banks, but noooo

same for wall street, main street, hawkish, dovish, bull, bear, cat bounce - whattt ?????

hello@illya.sh (Illya Gerasymchuk) — Sun, 24 Aug 2025 12:59:51 +0000

same for wall street, main street, hawkish, dovish, bull, bear, cat bounce - whattt ?????

this is neither about civil engineering nor wildlife reserve 🤨

📖 Quoted from 2025-08-24 13:53
https://illya.sh/thoughts/finance-has-a-lot-to-learn-from-engineering-especially-in
finance has A LOT to learn from engineering - especially in terms or standardization 😭

e.g. you're reading a british author, you may find "high street banks". it makes you think that there are also low street banks, or at least middle street banks, but noooo

ECB plans to limit the amount of digital Euro CBDC a wallet can hold

hello@illya.sh (Illya Gerasymchuk) — Mon, 25 Aug 2025 22:51:42 +0000

ECB plans to limit the amount of digital Euro CBDC a wallet can hold

this means you will be limited the amount of digital EUR you can own

this applies only to retail European Central Bank CBDC, not wholesale. the idea is to prevent excessive outflows of deposits from banks

retail CBDC is central bank money, so converting bank deposits into digital Euro changes the…

hello@illya.sh (Illya Gerasymchuk) — Tue, 26 Aug 2025 00:56:39 +0000

retail CBDC is central bank money, so converting bank deposits into digital Euro changes the composition of the monetary base - fewer commercial bank reserves at the central bank, more central bank CBDC liabilities

retail CBDC conversions settle in reserves

📖 Quoted from 2025-08-25 23:51
https://illya.sh/thoughts/ecb-plans-to-limit-the-amount-of-digital-euro-cbdc-a-wallet
ECB plans to limit the amount of digital Euro CBDC a wallet can hold

this means you will be limited the amount of digital EUR you can own

this applies only to retail European Central Bank CBDC, not wholesale. the idea is to prevent excessive outflows of deposits from banks

wholesale CBDC vs retail CBDC - what's the difference?

hello@illya.sh (Illya Gerasymchuk) — Wed, 27 Aug 2025 21:07:04 +0000

wholesale CBDC vs retail CBDC - what's the difference?

there's two types of central bank digital currencies (CBDC): retail CBDC and wholesale CBDC

➖ retail CBDC = used for ordinary transactions. digital version of the cash

➖ wholesale CBDC = used for interbank/financial institution settlement. tokenized central bank reserves

retail CBDC will be used for day-to-day payments, similar to the ones you do with with a credit…

hello@illya.sh (Illya Gerasymchuk) — Wed, 27 Aug 2025 21:08:37 +0000

retail CBDC will be used for day-to-day payments, similar to the ones you do with with a credit card. this is the type of CBDC you can use for business and consumer transactions, such as paying for a supermarket purchase

📖 Quoted from 2025-08-27 22:07
https://illya.sh/thoughts/wholesale-cbdc-vs-retail-cbdc-whats-the-difference
wholesale CBDC vs retail CBDC - what's the difference?

there's two types of central bank digital currencies (CBDC): retail CBDC and wholesale CBDC

➖ retail CBDC = used for ordinary transactions. digital version of the cash

➖ wholesale CBDC = used for interbank/financial institution settlement. tokenized central bank reserves

retail CBDC is the digital version of currency - a liability of the central bank in the balance…

hello@illya.sh (Illya Gerasymchuk) — Wed, 27 Aug 2025 21:11:02 +0000

retail CBDC is the digital version of currency - a liability of the central bank in the balance sheet

📖 Quoted from 2025-08-27 22:08
https://illya.sh/thoughts/retail-cbdc-will-be-used-for-day-to-day-payments-similar-to
retail CBDC will be used for day-to-day payments, similar to the ones you do with with a credit card. this is the type of CBDC you can use for business and consumer transactions, such as paying for a supermarket purchase

wholesale CBDC will be used by financial institutions only, such as commercial and central banks…

hello@illya.sh (Illya Gerasymchuk) — Wed, 27 Aug 2025 21:12:31 +0000

wholesale CBDC will be used by financial institutions only, such as commercial and central banks for interbank and market settlement

wholesale CBDC will only be transacted between select financial institutions - it's not something you'd use as a regular business or consumer

📖 Quoted from 2025-08-27 22:11
https://illya.sh/thoughts/retail-cbdc-is-the-digital-version-of-currency-a-liability
retail CBDC is the digital version of currency - a liability of the central bank in the balance sheet

thus, wholesale CBDC is a tokenized/digital version of central bank reserves used by the financial…

hello@illya.sh (Illya Gerasymchuk) — Wed, 27 Aug 2025 21:17:19 +0000

thus, wholesale CBDC is a tokenized/digital version of central bank reserves used by the financial market infrastructure (FMI) and banks

it also lives on the liability side of the central bank

📖 Quoted from 2025-08-27 22:12
https://illya.sh/thoughts/wholesale-cbdc-will-be-used-by-financial-institutions-only
wholesale CBDC will be used by financial institutions only, such as commercial and central banks for interbank and market settlement

wholesale CBDC will only be transacted between select financial institutions - it's not something you'd use as a regular business or consumer

91% of central banks are working on CBDCs, but not on a public blockchain

hello@illya.sh (Illya Gerasymchuk) — Wed, 27 Aug 2025 23:11:04 +0000

91% of central banks are working on CBDCs, but not on a public blockchain

85 out of 93 central banks (≈94% of global economic output) are engaged in some form of CBDC work

however, don't expect CBDCs to be implemented on permissionless blockchains like Ethereum

only 6% of advanced economies (AE) central banks and 40% of emerging economies (EM) central banks…

hello@illya.sh (Illya Gerasymchuk) — Thu, 28 Aug 2025 08:05:56 +0000

only 6% of advanced economies (AE) central banks and 40% of emerging economies (EM) central banks are considering distributed ledger technology (DLT) as an implementation layer for retail CBDCs

here, consider DLT = blockchain

📖 Quoted from 2025-08-28 00:11
https://illya.sh/thoughts/91-of-central-banks-are-working-on-cbdcs-but-not-on-a-public
91% of central banks are working on CBDCs, but not on a public blockchain

85 out of 93 central banks (≈94% of global economic output) are engaged in some form of CBDC work

however, don't expect CBDCs to be implemented on permissionless blockchains like Ethereum

>50% of central banks in both, advanced and emerging economies are considering using DLT for…

hello@illya.sh (Illya Gerasymchuk) — Thu, 28 Aug 2025 08:07:58 +0000

>50% of central banks in both, advanced and emerging economies are considering using DLT for wholesale CBDCs

this means that wholesale CBDC is likely to be implemented using some form of blockchain technology - much more likely than the retail CBDC

📖 Quoted from 2025-08-28 09:05
https://illya.sh/thoughts/only-6-of-advanced-economies-ae-central-banks-and-40-of
only 6% of advanced economies (AE) central banks and 40% of emerging economies (EM) central banks are considering distributed ledger technology (DLT) as an implementation layer for retail CBDCs

here, consider DLT = blockchain

however, even if CBDCs are implemented using blockchain - it's unlikely to be a public,…

hello@illya.sh (Illya Gerasymchuk) — Thu, 28 Aug 2025 08:12:31 +0000

however, even if CBDCs are implemented using blockchain - it's unlikely to be a public, permissionless blockchain like Ethereum

📖 Quoted from 2025-08-28 09:07
https://illya.sh/thoughts/50-of-central-banks-in-both-advanced-and-emerging-economies
>50% of central banks in both, advanced and emerging economies are considering using DLT for wholesale CBDCs

this means that wholesale CBDC is likely to be implemented using some form of blockchain technology - much more likely than the retail CBDC

>80% of central banks plan to operate the DLT/blockchain for wholesale CBDCs themselves, hinting…

hello@illya.sh (Illya Gerasymchuk) — Thu, 28 Aug 2025 08:13:34 +0000

>80% of central banks plan to operate the DLT/blockchain for wholesale CBDCs themselves, hinting an in-house blockchain solution, and not a public and permissionless ledger

📖 Quoted from 2025-08-28 09:12
https://illya.sh/thoughts/however-even-if-cbdcs-are-implemented-using-blockchain-its
however, even if CBDCs are implemented using blockchain - it's unlikely to be a public, permissionless blockchain like Ethereum

gold continues its uptrend towards the new $3500 all time high

hello@illya.sh (Illya Gerasymchuk) — Thu, 28 Aug 2025 22:47:34 +0000

gold continues its uptrend towards the new $3500 all time high

i've previously written how gold's price action suggests a consolidation before the next ATH

the last main resistance is the upper yellow trend line. once it's claimed as support expect gold to shoot to new highs

📖 Quoted from 2025-08-22 18:21
https://illya.sh/thoughts/quick-update-on-gold
quick update on gold:

everything according to the plan - the thesis remains valid. now just wait and let the price action unfold 😄

use these trend lines as a guide

real world and financial asset tokenization is ongoing worldwide, with transactions mostly settled…

hello@illya.sh (Illya Gerasymchuk) — Fri, 29 Aug 2025 19:01:29 +0000

real world and financial asset tokenization is ongoing worldwide, with transactions mostly settled in CBDCs

government and corporate bonds are the most common RWA to be tokenized

gold reached $3500 new all time high 🥳

hello@illya.sh (Illya Gerasymchuk) — Tue, 02 Sep 2025 14:51:26 +0000

gold reached $3500 new all time high 🥳

indeed once the yellow resistance trend line was broken - we saw a new all time high

the extended consolidation built up a strong future support

📖 Quoted from 2025-08-28 23:47
https://illya.sh/thoughts/gold-continues-its-uptrend-towards-the-new-3500-all-time
gold continues its uptrend towards the new $3500 all time high

i've previously written how gold's price action suggests a consolidation before the next ATH

the last main resistance is the upper yellow trend line. once it's claimed as support expect gold to shoot to new highs

now everyone is talking about gold 😄

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 13:07:14 +0000

now everyone is talking about gold 😄

i've been writing about an imminent new all time high and uptrend continuation for 3 months now - you can check back up on this thread

every long call in this thread has been accurate

gold is a very special asset this cycle

📖 Quoted from 2025-09-02 15:51
https://illya.sh/thoughts/gold-reached-3500-new-all-time-high
gold reached $3500 new all time high 🥳

indeed once the yellow resistance trend line was broken - we saw a new all time high

the extended consolidation built up a strong future support

gold revaluation will NOT solve the US debt problem

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 22:16:21 +0000

gold revaluation will NOT solve the US debt problem

the gain would cover less than 3% (≈1 trillion USD) of the outstanding national debt

most recently it took ≈9 months for the US government to accumulate $1T in new debt

previously, $1T in new debt was added in ≈100 days

gold revaluation proceeds are not necessarily used to cover sovereign debt

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 22:29:32 +0000

gold revaluation proceeds are not necessarily used to cover sovereign debt

central banks of Italy, Germany, Lebanon, South Africa & Curaçao and Sint Maarten reevaluated gold in the past, with some using the proceeds to finance the government, while others the central bank

📖 Quoted from 2025-09-04 23:16
https://illya.sh/thoughts/gold-revaluation-will-not-solve-the-us-debt-problem
gold revaluation will NOT solve the US debt problem

the gain would cover less than 3% (≈1 trillion USD) of the outstanding national debt

most recently it took ≈9 months for the US government to accumulate $1T in new debt

previously, $1T in new debt was added in ≈100 days

assuming all of the gold revaluation gains get credited to the Treasury's general account to…

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 23:30:46 +0000

assuming all of the gold revaluation gains get credited to the Treasury's general account to retire government debt (e.g. by re-purchasing US Treasury bonds from the market) - that would cover a mere ≈3% of outstanding US government debt

📖 Quoted from 2025-09-04 23:29
https://illya.sh/thoughts/gold-revaluation-proceeds-are-not-necessarily-used-to-cover
gold revaluation proceeds are not necessarily used to cover sovereign debt

central banks of Italy, Germany, Lebanon, South Africa & Curaçao and Sint Maarten reevaluated gold in the past, with some using the proceeds to finance the government, while others the central bank

persistent deficits & refinancing needs will add $1 trillion of new debt in less than a year

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 23:34:24 +0000

persistent deficits & refinancing needs will add $1 trillion of new debt in less than a year

so gold revaluation is insignificant for US federal government's debt problem

📖 Quoted from 2025-09-05 00:30
https://illya.sh/thoughts/assuming-all-of-the-gold-revaluation-gains-get-credited-to
assuming all of the gold revaluation gains get credited to the Treasury's general account to retire government debt (e.g. by re-purchasing US Treasury bonds from the market) - that would cover a mere ≈3% of outstanding US government debt

retiring debt with gold revaluation would change the composition of liquidity:

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 23:38:22 +0000

retiring debt with gold revaluation would change the composition of liquidity:

➖ less US government bonds (safe collateral)
➕ more base money (reserves) and/or broad money (deposits)

so the end result is more base and/or broad money, but less prime/repo-eligible collateral

📖 Quoted from 2025-09-05 00:34
https://illya.sh/thoughts/persistent-deficits-refinancing-needs-will-add-1-trillion-of
persistent deficits & refinancing needs will add $1 trillion of new debt in less than a year

so gold revaluation is insignificant for US federal government's debt problem

collateral gets reused/rehypothecated, reserves don't

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 23:40:49 +0000

collateral gets reused/rehypothecated, reserves don't

dealers re-pledge/re-use Treasuries, e.g. through repo and reverse repo. thus, the financing capacity of Treasury bills, notes and bonds exceeds their market value

📖 Quoted from 2025-09-05 00:38
https://illya.sh/thoughts/retiring-debt-with-gold-revaluation-would-change-the
retiring debt with gold revaluation would change the composition of liquidity:

➖ less US government bonds (safe collateral)
➕ more base money (reserves) and/or broad money (deposits)

so the end result is more base and/or broad money, but less prime/repo-eligible collateral

to estimate the maximum liquidity that can be added by a bond divide the market value by its…

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 23:43:32 +0000

to estimate the maximum liquidity that can be added by a bond divide the market value by its haircut (e.g. effective repo haircut on that bond)

📖 Quoted from 2025-09-05 00:40
https://illya.sh/thoughts/collateral-gets-reused-rehypothecated-reserves-dont
collateral gets reused/rehypothecated, reserves don't

dealers re-pledge/re-use Treasuries, e.g. through repo and reverse repo. thus, the financing capacity of Treasury bills, notes and bonds exceeds their market value

maximum liquidity added by bond = market value/haircut

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 23:47:51 +0000

maximum liquidity added by bond = market value/haircut

so a Treasury security worth $1000 with a haircut of 2%, can create up to $50000 in new credit/liquidity

computed using the formula above: 1000/0.02=50000

📖 Quoted from 2025-09-05 00:43
https://illya.sh/thoughts/to-estimate-the-maximum-liquidity-that-can-be-added-by-a
to estimate the maximum liquidity that can be added by a bond divide the market value by its haircut (e.g. effective repo haircut on that bond)

thus, a 30 year Treasury bond trading at par (i.e. market value = face value = $1000) can create…

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Sep 2025 23:50:28 +0000

thus, a 30 year Treasury bond trading at par (i.e. market value = face value = $1000) can create up to $50K of new liquidity/credit!

you cannot leverage as much with reserve money. so a $1000 bond can create more liquidity than $1000 cash/reserves

📖 Quoted from 2025-09-05 00:47
https://illya.sh/thoughts/maximum-liquidity-added-by-bond-market-value-haircut
maximum liquidity added by bond = market value/haircut

so a Treasury security worth $1000 with a haircut of 2%, can create up to $50000 in new credit/liquidity

computed using the formula above: 1000/0.02=50000

current tri-party repo haircut average for Treasury collateral is 2%, supervisory is 4% (Capital…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 12:40:13 +0000

current tri-party repo haircut average for Treasury collateral is 2%, supervisory is 4% (Capital Adequacy Requirements)

with a 2% haircut the collateral funding multiplier is 50x, with a 4% haircut - 25x

the smaller the haircut - the larger the maximum rehypothecated credit

📖 Quoted from 2025-09-05 00:50
https://illya.sh/thoughts/thus-a-30-year-treasury-bond-trading-at-par-i-e-market-value
thus, a 30 year Treasury bond trading at par (i.e. market value = face value = $1000) can create up to $50K of new liquidity/credit!

you cannot leverage as much with reserve money. so a $1000 bond can create more liquidity than $1000 cash/reserves

in non-centrally cleared bilateral repos (NCCBR) the Treasury haircut is mostly 0%, and a…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 22:59:42 +0000

in non-centrally cleared bilateral repos (NCCBR) the Treasury haircut is mostly 0%, and a significant portion has negative haircuts - meaning that more money is lent in the repo that the market value of the Treasury collateral

📖 Quoted from 2025-09-05 13:40
https://illya.sh/thoughts/current-tri-party-repo-haircut-average-for-treasury
current tri-party repo haircut average for Treasury collateral is 2%, supervisory is 4% (Capital Adequacy Requirements)

with a 2% haircut the collateral funding multiplier is 50x, with a 4% haircut - 25x

the smaller the haircut - the larger the maximum rehypothecated credit

NCCBR are essentially bilateral OTC agreements - no central counterparty or tri-party custodian

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:00:14 +0000

NCCBR are essentially bilateral OTC agreements - no central counterparty or tri-party custodian

📖 Quoted from 2025-09-05 23:59
https://illya.sh/thoughts/in-non-centrally-cleared-bilateral-repos-nccbr-the-treasury
in non-centrally cleared bilateral repos (NCCBR) the Treasury haircut is mostly 0%, and a significant portion has negative haircuts - meaning that more money is lent in the repo that the market value of the Treasury collateral

NCCBR users are mostly institutions part of the financial market infrastructure - such as dealers…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:00:45 +0000

NCCBR users are mostly institutions part of the financial market infrastructure - such as dealers and hedge funds

they use NCCBR to manage their balance sheets and regulatory obligations. so a high need for Treasury collateral may drive the the haircuts negative

📖 Quoted from 2025-09-06 00:00
https://illya.sh/thoughts/nccbr-are-essentially-bilateral-otc-agreements-no-central
NCCBR are essentially bilateral OTC agreements - no central counterparty or tri-party custodian

NCCBR participants are generally subject to regulations and balance sheet constraints - so don't…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:02:36 +0000

NCCBR participants are generally subject to regulations and balance sheet constraints - so don't think that null/negative haircuts means the collateral can be rehypothecated infinitely

these bilateral arrangements is where financial institutions manage their liquidity needs

📖 Quoted from 2025-09-06 00:00
https://illya.sh/thoughts/nccbr-users-are-mostly-institutions-part-of-the-financial
NCCBR users are mostly institutions part of the financial market infrastructure - such as dealers and hedge funds

they use NCCBR to manage their balance sheets and regulatory obligations. so a high need for Treasury collateral may drive the the haircuts negative

so if the US Treasury revaluated gold and used all those proceeds to repurchase/retire debt it…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:03:33 +0000

so if the US Treasury revaluated gold and used all those proceeds to repurchase/retire debt it will likely have an initial negative effect on the liquidity, due to contraction in safe collateral

📖 Quoted from 2025-09-06 00:02
https://illya.sh/thoughts/nccbr-participants-are-generally-subject-to-regulations-and
NCCBR participants are generally subject to regulations and balance sheet constraints - so don't think that null/negative haircuts means the collateral can be rehypothecated infinitely

these bilateral arrangements is where financial institutions manage their liquidity needs

while the haircut may also fall (upward pressure on liquidity), the volume reduction (downward…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:05:13 +0000

while the haircut may also fall (upward pressure on liquidity), the volume reduction (downward pressure on liquidity) is likely to have more weight, due to global refinancing/liquidity needs

📖 Quoted from 2025-09-06 00:03
https://illya.sh/thoughts/so-if-the-us-treasury-revaluated-gold-and-used-all-those
so if the US Treasury revaluated gold and used all those proceeds to repurchase/retire debt it will likely have an initial negative effect on the liquidity, due to contraction in safe collateral

so assuming no sanitization - an initial reduction of liquidity may occur

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:06:44 +0000

so assuming no sanitization - an initial reduction of liquidity may occur

📖 Quoted from 2025-09-06 00:05
https://illya.sh/thoughts/while-the-haircut-may-also-fall-upward-pressure-on-liquidity
while the haircut may also fall (upward pressure on liquidity), the volume reduction (downward pressure on liquidity) is likely to have more weight, due to global refinancing/liquidity needs

in practice, some level of sanitization (direct or indirect) will occur, and that Treasury…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:08:58 +0000

in practice, some level of sanitization (direct or indirect) will occur, and that Treasury debt/safe collateral would likely be reintroduced back via Treasury issuance and/or Fed facilities within a year

📖 Quoted from 2025-09-06 00:06
https://illya.sh/thoughts/so-assuming-no-sanitization-an-initial-reduction-of
so assuming no sanitization - an initial reduction of liquidity may occur

soon i'll write a thread on how central banks/governments reevaluate gold and how the monetary…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:10:35 +0000

soon i'll write a thread on how central banks/governments reevaluate gold and how the monetary gains can be used to cover central bank and/or government debt

i'll add a link to it in this thread once it’s ready

📖 Quoted from 2025-09-06 00:08
https://illya.sh/thoughts/in-practice-some-level-of-sanitization-direct-or-indirect
in practice, some level of sanitization (direct or indirect) will occur, and that Treasury debt/safe collateral would likely be reintroduced back via Treasury issuance and/or Fed facilities within a year

in order to understand the mechanics of gold revaluation - it's important to understand the unique…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:11:42 +0000

in order to understand the mechanics of gold revaluation - it's important to understand the unique legal position of banks to issue broad money, and that their mode of operation differs greatly from non-credit issuance businesses

📖 Quoted from 2025-09-06 00:10
https://illya.sh/thoughts/soon-ill-write-a-thread-on-how-central-banks-governments
soon i'll write a thread on how central banks/governments reevaluate gold and how the monetary gains can be used to cover central bank and/or government debt

i'll add a link to it in this thread once it’s ready

i wrote a thread explaining the business model of banks here:…

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Sep 2025 23:24:29 +0000

i wrote a thread explaining the business model of banks here: https://illya.sh/threads/@1755863018-1.html

the information in it is important to understand the balance sheet dynamics of gold reevaluation

📖 Quoted from 2025-09-06 00:11
https://illya.sh/thoughts/in-order-to-understand-the-mechanics-of-gold-revaluation-its
in order to understand the mechanics of gold revaluation - it's important to understand the unique legal position of banks to issue broad money, and that their mode of operation differs greatly from non-credit issuance businesses

EU real estate prices will continue to increase

hello@illya.sh (Illya Gerasymchuk) — Sun, 07 Sep 2025 18:39:48 +0000

EU real estate prices will continue to increase

with investment capital moving away from US to the EU, a significant portion of it will will flow into housing, thus pushing sale and rent prices up

specially true for high-demand areas, like coastal & large cities

this increase will be more accentuated in lower per-capita GDP countries - as cross-border capital…

hello@illya.sh (Illya Gerasymchuk) — Sun, 07 Sep 2025 18:46:33 +0000

this increase will be more accentuated in lower per-capita GDP countries - as cross-border capital flows in to fill the price gap

lower GDP + highly desired location is the recipe for higher yields 😄

you can observe this in countries like Portugal in the table below

📖 Quoted from 2025-09-07 19:39
https://illya.sh/thoughts/eu-real-estate-prices-will-continue-to-increase
EU real estate prices will continue to increase

with investment capital moving away from US to the EU, a significant portion of it will will flow into housing, thus pushing sale and rent prices up

specially true for high-demand areas, like coastal & large cities

remember that real estate runs on credit - and in the most basic approach - the bank happily…

hello@illya.sh (Illya Gerasymchuk) — Sun, 07 Sep 2025 18:49:58 +0000

remember that real estate runs on credit - and in the most basic approach - the bank happily finances 75% of the value of the property. this is true even if you're just starting

as you accumulate collateral/properties it becomes easier and easier, as you can cross-collateralize

📖 Quoted from 2025-09-07 19:46
https://illya.sh/thoughts/this-increase-will-be-more-accentuated-in-lower-per-capita
this increase will be more accentuated in lower per-capita GDP countries - as cross-border capital flows in to fill the price gap

lower GDP + highly desired location is the recipe for higher yields 😄

you can observe this in countries like Portugal in the table below

just as charted: with the yellow line resistance broken gold has risen over 6%

hello@illya.sh (Illya Gerasymchuk) — Mon, 08 Sep 2025 13:54:11 +0000

just as charted: with the yellow line resistance broken gold has risen over 6%

this thread covers the whole consolidation move, where i explained how it's a bullish precursor

the original goal of this thread was to follow gold until it breaks $3.5K, and now we're 0.15K above 😄

📖 Quoted from 2025-09-04 14:07
https://illya.sh/thoughts/now-everyone-is-talking-about-gold
now everyone is talking about gold 😄

i've been writing about an imminent new all time high and uptrend continuation for 3 months now - you can check back up on this thread

every long call in this thread has been accurate

gold is a very special asset this cycle

real estate is a great asset because banks lend ≈75% of its value

hello@illya.sh (Illya Gerasymchuk) — Thu, 11 Sep 2025 23:19:00 +0000

real estate is a great asset because banks lend ≈75% of its value

so if your property is worth $100K, you can borrow $75K against it at a low rate

the immovable property is used as collateral

≈80% of lending in financial markets is collateral-based

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Sep 2025 12:45:28 +0000

≈80% of lending in financial markets is collateral-based

financial institutions use government bonds as collateral for short-term loans

you're using immovable property as collateral for a generally longer term-loan

📖 Quoted from 2025-09-12 00:19
https://illya.sh/thoughts/real-estate-is-a-great-asset-because-banks-lend-75-of-its
real estate is a great asset because banks lend ≈75% of its value

so if your property is worth $100K, you can borrow $75K against it at a low rate

the immovable property is used as collateral

collateralized lending comes with smaller interest rates/financing cost because it's low risk for…

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Sep 2025 13:12:40 +0000

collateralized lending comes with smaller interest rates/financing cost because it's low risk for the lender

if you default - the lender keeps your collateral

haircuts and spread are set sufficiently high to cover liquidity, term and market risks

📖 Quoted from 2025-09-13 13:45
https://illya.sh/thoughts/80-of-lending-in-financial-markets-is-collateral-based
≈80% of lending in financial markets is collateral-based

financial institutions use government bonds as collateral for short-term loans

you're using immovable property as collateral for a generally longer term-loan

this is why a 7 day Treasury bill-backed repo agreement may have 2% haircut and a 0.1% spread,…

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Sep 2025 13:37:39 +0000

this is why a 7 day Treasury bill-backed repo agreement may have 2% haircut and a 0.1% spread, while a 20 year immovable property collateralized loan a 25% haircut and a 2% spread

the T-bill is more liquid, less volatile and the loan term is much shorter

📖 Quoted from 2025-09-13 14:12
https://illya.sh/thoughts/collateralized-lending-comes-with-smaller-interest-rates
collateralized lending comes with smaller interest rates/financing cost because it's low risk for the lender

if you default - the lender keeps your collateral

haircuts and spread are set sufficiently high to cover liquidity, term and market risks

so by using real estate as collateral you're just tapping into the existing low interest…

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Sep 2025 13:38:23 +0000

so by using real estate as collateral you're just tapping into the existing low interest liquidity/credit line

at the same time the property earns a yield (e.g. via rents) and generally appreciates

📖 Quoted from 2025-09-13 14:37
https://illya.sh/thoughts/this-is-why-a-7-day-treasury-bill-backed-repo-agreement-may
this is why a 7 day Treasury bill-backed repo agreement may have 2% haircut and a 0.1% spread, while a 20 year immovable property collateralized loan a 25% haircut and a 2% spread

the T-bill is more liquid, less volatile and the loan term is much shorter

as the immovable property appreciates, so do your assets and financing capacity. with a more…

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Sep 2025 13:40:55 +0000

as the immovable property appreciates, so do your assets and financing capacity. with a more valuable collateral asset - the bank will give a larger loan

increasing real estate purchase prices push rent prices up as well. so may increased interest rates, since it's harder to buy

📖 Quoted from 2025-09-13 14:38
https://illya.sh/thoughts/so-by-using-real-estate-as-collateral-youre-just-tapping
so by using real estate as collateral you're just tapping into the existing low interest liquidity/credit line

at the same time the property earns a yield (e.g. via rents) and generally appreciates

given that housing is a core necessity for most combined with the willingness of banks to finance…

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Sep 2025 13:55:10 +0000

given that housing is a core necessity for most combined with the willingness of banks to finance against immovable property creates a high persistent demand for real estate

📖 Quoted from 2025-09-13 14:40
https://illya.sh/thoughts/as-the-immovable-property-appreciates-so-do-your-assets-and
as the immovable property appreciates, so do your assets and financing capacity. with a more valuable collateral asset - the bank will give a larger loan

increasing real estate purchase prices push rent prices up as well. so may increased interest rates, since it's harder to buy

this makes immovable property a good hedge against inflation and economic downturn

hello@illya.sh (Illya Gerasymchuk) — Sat, 13 Sep 2025 14:01:32 +0000

this makes immovable property a good hedge against inflation and economic downturn

price adjusts to value & while the composition of demand may change (e.g. shift towards smaller/cheaper units) - the demand for property will inherently remain high

📖 Quoted from 2025-09-13 14:55
https://illya.sh/thoughts/given-that-housing-is-a-core-necessity-for-most-combined
given that housing is a core necessity for most combined with the willingness of banks to finance against immovable property creates a high persistent demand for real estate

since i've written this, gold is up ≈16%

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Sep 2025 13:28:36 +0000

since i've written this, gold is up ≈16%

≈25% if you count from the tariffs announcements on April 7th

i will re-iterate that in order to protect the EUR the ECB should increase their onshore gold holdings

📖 Quoted from 2025-04-03 17:28
https://illya.sh/thoughts/the-best-countermeasure-that-eu-can-take-is-swapping-us
🇪🇺 The best countermeasure that EU can take is swapping US securities for Gold

Gold is inversely correlated with USD. Such a decision can be done today and it will:

1️⃣be a response to the US
2️⃣increase value of EUR
3️⃣minimize consumer impact

Anything else will hurt the economy

gold is a great asset to hold for the next 5 years

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Sep 2025 21:51:17 +0000

gold is a great asset to hold for the next 5 years

it's a hedge against the credit & refinancing bubble of the US equity markets + government debt

but not only against USD - all FIAT & risk assets including crypto

the financial system infrastructure, including monetary policies of the central banks are correlated

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Sep 2025 21:51:56 +0000

the financial system infrastructure, including monetary policies of the central banks are correlated

they're heavily exposed to the same set of assets - a lot of which are USD-denominated

this is of course extremely pro-cyclical

📖 Quoted from 2025-09-14 22:51
https://illya.sh/thoughts/gold-is-a-great-asset-to-hold-for-the-next-5-years
gold is a great asset to hold for the next 5 years

it's a hedge against the credit & refinancing bubble of the US equity markets + government debt

but not only against USD - all FIAT & risk assets including crypto

in addition to being a store of value, gold is also acting as an investment

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Sep 2025 21:52:18 +0000

in addition to being a store of value, gold is also acting as an investment

it's up ≈40% YTD

this is gold catching up to inflation and accumulated leverage

📖 Quoted from 2025-09-14 22:51
https://illya.sh/thoughts/the-financial-system-infrastructure-including-monetary
the financial system infrastructure, including monetary policies of the central banks are correlated

they're heavily exposed to the same set of assets - a lot of which are USD-denominated

this is of course extremely pro-cyclical

the financial system is heavily dependent on refinancing

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Sep 2025 23:32:38 +0000

the financial system is heavily dependent on refinancing

this is true for both, governments and the public sector - especially the financial institutions

≈70% of all new credit is used for refinancing/repaying of existing maturing debt rather than novel financing

📖 Quoted from 2025-09-14 22:52
https://illya.sh/thoughts/in-addition-to-being-a-store-of-value-gold-is-also-acting-as
in addition to being a store of value, gold is also acting as an investment

it's up ≈40% YTD

this is gold catching up to inflation and accumulated leverage

leverage and the carry trades eventually unwind

hello@illya.sh (Illya Gerasymchuk) — Sun, 14 Sep 2025 23:33:30 +0000

leverage and the carry trades eventually unwind

at some point there isn't enough on-demand liquidity and mass defaults, losses and insolvency occur

this is when the cycle tops/bubble pops

📖 Quoted from 2025-09-15 00:32
https://illya.sh/thoughts/the-financial-system-is-heavily-dependent-on-refinancing
the financial system is heavily dependent on refinancing

this is true for both, governments and the public sector - especially the financial institutions

≈70% of all new credit is used for refinancing/repaying of existing maturing debt rather than novel financing

🇪🇺 ECB gained €10.5B on gold from 2023 to 2024

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Sep 2025 19:52:57 +0000

🇪🇺 ECB gained €10.5B on gold from 2023 to 2024

2025 YTD running gains add another net positive ≈€10B & likely to be higher by the year end's gold revaluation

that's an implied ≈8% yield on gold appreciation - much more than the ECB earned from other asset buckets

to clarify: European Central Bank didn't increase its gold holdings, but the gold that ECB already…

hello@illya.sh (Illya Gerasymchuk) — Mon, 15 Sep 2025 20:09:33 +0000

to clarify: European Central Bank didn't increase its gold holdings, but the gold that ECB already owns (≈506 tonnes) increased in value, since gold's market price increased

ECB reevaluates gold at the end of every year and credits or debits the revelation account accordingly

📖 Quoted from 2025-09-15 20:52
https://illya.sh/thoughts/ecb-gained-10-5b-on-gold-from-2023-to-2024
🇪🇺 ECB gained €10.5B on gold from 2023 to 2024

2025 YTD running gains add another net positive ≈€10B & likely to be higher by the year end's gold revaluation

that's an implied ≈8% yield on gold appreciation - much more than the ECB earned from other asset buckets

ECB's legal framework forbids the use of gold revaluation proceeds to pay expenses or operating…

hello@illya.sh (Illya Gerasymchuk) — Tue, 16 Sep 2025 11:49:46 +0000

ECB's legal framework forbids the use of gold revaluation proceeds to pay expenses or operating losses

unrealized gains are not recognized as income and are instead credited to the revaluation account

revaluation account is under liability/equity on the ECB's balance sheet

moreover, as per Eurosystem's accounting framework unrealized gains are non-distributable and may…

hello@illya.sh (Illya Gerasymchuk) — Tue, 16 Sep 2025 11:51:19 +0000

moreover, as per Eurosystem's accounting framework unrealized gains are non-distributable and may only offset future unrealized losses on the same item

📖 Quoted from 2025-09-16 12:49
https://illya.sh/thoughts/ecbs-legal-framework-forbids-the-use-of-gold-revaluation
ECB's legal framework forbids the use of gold revaluation proceeds to pay expenses or operating losses

unrealized gains are not recognized as income and are instead credited to the revaluation account

revaluation account is under liability/equity on the ECB's balance sheet

this means the ECB can only use unrealized gold gains to cover/offset future unrealized losses on…

hello@illya.sh (Illya Gerasymchuk) — Tue, 16 Sep 2025 11:52:20 +0000

this means the ECB can only use unrealized gold gains to cover/offset future unrealized losses on gold

these unrealized gains can neither offset an operational, nor a loss in another security bucket, such as FX

📖 Quoted from 2025-09-16 12:51
https://illya.sh/thoughts/moreover-as-per-eurosystems-accounting-framework-unrealized
moreover, as per Eurosystem's accounting framework unrealized gains are non-distributable and may only offset future unrealized losses on the same item

once a gain is realized, the corresponding proportion is debited to the revaluation account and…

hello@illya.sh (Illya Gerasymchuk) — Tue, 16 Sep 2025 11:55:18 +0000

once a gain is realized, the corresponding proportion is debited to the revaluation account and credited to an income account/ booked to P&L

at the end of the year PnL is closed into equity by increasing equity reserves and/or NCB liabilities

thus, unrealized gold gains accumulate on the ECB's liability side, under the revaluation account,…

hello@illya.sh (Illya Gerasymchuk) — Tue, 16 Sep 2025 11:55:36 +0000

thus, unrealized gold gains accumulate on the ECB's liability side, under the revaluation account, and the only way they can be debited (e.g. to cover expenses, or credit an NCB's reserve account) is:

1️⃣ when the ECB sells the gold, thus turning an unrealized gain into a realized one

2️⃣ offset future losses in the gold bucket

📖 Quoted from 2025-09-16 12:52
https://illya.sh/thoughts/this-means-the-ecb-can-only-use-unrealized-gold-gains-to
this means the ECB can only use unrealized gold gains to cover/offset future unrealized losses on gold

these unrealized gains can neither offset an operational, nor a loss in another security bucket, such as FX

after ECB's realized gains are booked to PnL, the ECB splits up the net profit as:

hello@illya.sh (Illya Gerasymchuk) — Tue, 16 Sep 2025 11:57:22 +0000

after ECB's realized gains are booked to PnL, the ECB splits up the net profit as:

➖ up to 20% to the general reserve fund, which can be used to offset future PnL losses

➖ the rest distributed to the NCB's, proportional to the National Central Bank's paid-up shares

📖 Quoted from 2025-09-16 12:55
https://illya.sh/thoughts/thus-unrealized-gold-gains-accumulate-on-the-ecbs-liability
thus, unrealized gold gains accumulate on the ECB's liability side, under the revaluation account, and the only way they can be debited (e.g. to cover expenses, or credit an NCB's reserve account) is:

1️⃣ when the ECB sells the gold, thus turning an unrealized gain into a realized one

2️⃣ offset future losses in the gold bucket

👋 hello, $3700 gold

hello@illya.sh (Illya Gerasymchuk) — Tue, 16 Sep 2025 13:26:42 +0000

👋 hello, $3700 gold

📖 Quoted from 2025-09-08 14:54
https://illya.sh/thoughts/just-as-charted-with-the-yellow-line-resistance-broken-gold
just as charted: with the yellow line resistance broken gold has risen over 6%

this thread covers the whole consolidation move, where i explained how it's a bullish precursor

the original goal of this thread was to follow gold until it breaks $3.5K, and now we're 0.15K above 😄

watch the Fed's projection dot plot, not the Fed Funds rate

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 07:57:06 +0000

watch the Fed's projection dot plot, not the Fed Funds rate

the 25bp/0.25% cut on September 17th 2025 will happen, and it's mostly priced in

it's the future interest rate policy guidance that can amplify a market move either way

based on the current Fed policy guidance available since June 2025, by the end of 2025 the Fed…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 07:57:33 +0000

based on the current Fed policy guidance available since June 2025, by the end of 2025 the Fed Funds rate should be ≈3.9%

current one is 4.25%-4.50%, so we either get a larger than 25bp cut or several rate cuts this year

📖 Quoted from 2025-09-17 08:57
https://illya.sh/thoughts/watch-the-feds-projection-dot-plot-not-the-fed-funds-rate
watch the Fed's projection dot plot, not the Fed Funds rate

the 25bp/0.25% cut on September 17th 2025 will happen, and it's mostly priced in

it's the future interest rate policy guidance that can amplify a market move either way

a cut larger than 25bp is highly unlikely, since the current CME's 30 Day Federal Funds Futures…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 07:58:31 +0000

a cut larger than 25bp is highly unlikely, since the current CME's 30 Day Federal Funds Futures price strongly implies a 4.0%-4.25% target rate

this is 25bp/0.25% below the current target rate of 4.25%-4.5%

📖 Quoted from 2025-09-17 08:57
https://illya.sh/thoughts/based-on-the-current-fed-policy-guidance-available-since
based on the current Fed policy guidance available since June 2025, by the end of 2025 the Fed Funds rate should be ≈3.9%

current one is 4.25%-4.50%, so we either get a larger than 25bp cut or several rate cuts this year

so the most likely outcome is a 25bp/0.25% rate cut on September 17th 2025, and then at least one…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 07:58:56 +0000

so the most likely outcome is a 25bp/0.25% rate cut on September 17th 2025, and then at least one more cut in 2025

📖 Quoted from 2025-09-17 08:58
https://illya.sh/thoughts/a-cut-larger-than-25bp-is-highly-unlikely-since-the-current
a cut larger than 25bp is highly unlikely, since the current CME's 30 Day Federal Funds Futures price strongly implies a 4.0%-4.25% target rate

this is 25bp/0.25% below the current target rate of 4.25%-4.5%

during the Sept 17th 2025 FOMC meeting, the Fed will publish a new dot plot with the suggested…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 08:00:04 +0000

during the Sept 17th 2025 FOMC meeting, the Fed will publish a new dot plot with the suggested interest rates for 2025, 2026, 2027 and longer-term

📖 Quoted from 2025-09-17 08:58
https://illya.sh/thoughts/so-the-most-likely-outcome-is-a-25bp-0-25-rate-cut-on
so the most likely outcome is a 25bp/0.25% rate cut on September 17th 2025, and then at least one more cut in 2025

how will asset prices react to Fed's interest rate decision?

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 08:10:29 +0000

how will asset prices react to Fed's interest rate decision?

if the FOMC members suggest rates lower than in the June 2025 - expect an upwards rally in assets

if the FOMC members suggest higher or non-decreasing near future rates - expect a downward rally/profit taking in assets

📖 Quoted from 2025-09-17 09:00
https://illya.sh/thoughts/during-the-sept-17th-2025-fomc-meeting-the-fed-will-publish
during the Sept 17th 2025 FOMC meeting, the Fed will publish a new dot plot with the suggested interest rates for 2025, 2026, 2027 and longer-term

it's not just the Fed, the ECB is also lowering rates into higher inflation

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 11:10:09 +0000

it's not just the Fed, the ECB is also lowering rates into higher inflation

this puts upwards pressure on both, real estate purchase and rent prices

so you can expect both - house prices and rents - to increase throughout the next 2 years

i've previously written an article about what makes real estate so special in terms of…

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 11:11:31 +0000

i've previously written an article about what makes real estate so special in terms of funding/re-funding capacity

banks finance ≈75% LTV on real estate purchases, and you can use existing properties as additional collateral

🧵read it here: https://illya.sh/threads/@1757632740-1.html

📖 Quoted from 2025-09-17 12:10
https://illya.sh/thoughts/its-not-just-the-fed-the-ecb-is-also-lowering-rates-into
it's not just the Fed, the ECB is also lowering rates into higher inflation

this puts upwards pressure on both, real estate purchase and rent prices

so you can expect both - house prices and rents - to increase throughout the next 2 years

these dynamics create an incentive for further upward price pressure:

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 11:12:48 +0000

these dynamics create an incentive for further upward price pressure:

➖ purchase prices raise due to low rates and ample financing
➖rent prices raise because purchase prices become too high

📖 Quoted from 2025-09-17 12:11
https://illya.sh/thoughts/ive-previously-written-an-article-about-what-makes-real
i've previously written an article about what makes real estate so special in terms of funding/re-funding capacity

banks finance ≈75% LTV on real estate purchases, and you can use existing properties as additional collateral

🧵read it here: https://illya.sh/threads/@1757632740-1.html

what's up with the "urging" the Fed to cut by 50 bps today?

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 12:51:30 +0000

what's up with the "urging" the Fed to cut by 50 bps today?

the rate cut is known NOW - and it will be no more & no less than 25 bps/0.25%. there is absolutely nothing to speculate about here

i assure you that your urges won't affect what the market already priced in 😄

there will NOT be a 50 bps rate cut

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 16:28:00 +0000

there will NOT be a 50 bps rate cut

there is nothing to predict or speculate:

1. open FedWatch
2. observe

that's where institutions are hedging

30 day FedFunds futures implied target rate will NOT be wrong

you'll see in a bit 😉

and there you go - the Fed cut the rates by 25 bps

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 18:07:38 +0000

and there you go - the Fed cut the rates by 25 bps

📖 Quoted from 2025-09-17 17:28
https://illya.sh/thoughts/there-will-not-be-a-50-bps-rate-cut
there will NOT be a 50 bps rate cut

there is nothing to predict or speculate:

1. open FedWatch
2. observe

that's where institutions are hedging

30 day FedFunds futures implied target rate will NOT be wrong

you'll see in a bit 😉

that 1 hour candle on gold 😂😂

hello@illya.sh (Illya Gerasymchuk) — Wed, 17 Sep 2025 19:13:21 +0000

that 1 hour candle on gold 😂😂

and a new all time high within all that move

≈$3515 is a great price area to long gold during the pullback

hello@illya.sh (Illya Gerasymchuk) — Thu, 18 Sep 2025 17:06:57 +0000

≈$3515 is a great price area to long gold during the pullback

you'll need to adjust the exact price to your ticker/derivative, but in the chart you can see how to find the relevant support (assuming your asset mirrors gold spot/futures)

and remember the strong support below

≈$39.6 is a great area to long silver during the pullback

hello@illya.sh (Illya Gerasymchuk) — Thu, 18 Sep 2025 19:03:32 +0000

≈$39.6 is a great area to long silver during the pullback

similar to gold, there is also a strong support below, which will further fuel buying pressure

adapt the exact price to your ticker/derivative. chart below shows how to identify it (dashed line)

reducing the cost of capital by 25bps wouldn't affect mortgage that much - as it doesn't eliminate…

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 19:42:10 +0000

reducing the cost of capital by 25bps wouldn't affect mortgage that much - as it doesn't eliminate the existing risk in the market (i.e. existing mortgages)

to lower mortgage rates the Fed will likely do a mortgage-targeted QE, like with MBS in 2008 QE1

in fact, mortgage rates in the US have been on a downtrend for a while - way before the rate cut

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 19:50:27 +0000

in fact, mortgage rates in the US have been on a downtrend for a while - way before the rate cut

the markets have also gradually priced-in the September for a while, as you could observe in FedFunds futures

current area is also a monthly support, upwards pressure is expected

📖 Quoted from 2025-09-19 20:42
https://illya.sh/thoughts/reducing-the-cost-of-capital-by-25bps-wouldnt-affect
reducing the cost of capital by 25bps wouldn't affect mortgage that much - as it doesn't eliminate the existing risk in the market (i.e. existing mortgages)

to lower mortgage rates the Fed will likely do a mortgage-targeted QE, like with MBS in 2008 QE1

in the longer-term mortgage rates in the US will likely increase, but not because of interest rate…

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 20:55:08 +0000

in the longer-term mortgage rates in the US will likely increase, but not because of interest rate cuts

📖 Quoted from 2025-09-19 20:50
https://illya.sh/thoughts/in-fact-mortgage-rates-in-the-us-have-been-on-a-downtrend
in fact, mortgage rates in the US have been on a downtrend for a while - way before the rate cut

the markets have also gradually priced-in the September for a while, as you could observe in FedFunds futures

current area is also a monthly support, upwards pressure is expected

in the US, there's been a real estate bubble in the building since 1990's (pun intended). it was…

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 20:56:45 +0000

in the US, there's been a real estate bubble in the building since 1990's (pun intended). it was about to burst/de-leverage several times, but it was refueled via QE and government guarantees among others, thus delaying it

📖 Quoted from 2025-09-19 21:55
https://illya.sh/thoughts/in-the-longer-term-mortgage-rates-in-the-us-will-likely
in the longer-term mortgage rates in the US will likely increase, but not because of interest rate cuts

so expect a 2008 QE-1 style balance sheet expansion by the Fed targeting mortgage securities via OMO

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 21:04:26 +0000

so expect a 2008 QE-1 style balance sheet expansion by the Fed targeting mortgage securities via OMO

there will also likely be additional government policies and programs, such as increasing the scope and volume of explicit government guarantees on mortgage securities

📖 Quoted from 2025-09-19 21:56
https://illya.sh/thoughts/in-the-us-theres-been-a-real-estate-bubble-in-the-building
in the US, there's been a real estate bubble in the building since 1990's (pun intended). it was about to burst/de-leverage several times, but it was refueled via QE and government guarantees among others, thus delaying it

mortgage-rates targeted QE, such as the mass purchase of mortgage backed securities (MBS) by the…

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 21:08:33 +0000

mortgage-rates targeted QE, such as the mass purchase of mortgage backed securities (MBS) by the Fed will drive the mortgage yields down short-term, but also further leverage that market sector in the process

📖 Quoted from 2025-09-19 22:04
https://illya.sh/thoughts/so-expect-a-2008-qe-1-style-balance-sheet-expansion-by-the
so expect a 2008 QE-1 style balance sheet expansion by the Fed targeting mortgage securities via OMO

there will also likely be additional government policies and programs, such as increasing the scope and volume of explicit government guarantees on mortgage securities

the same is true for government policies or programs - those are also likely to push mortgage…

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 21:11:10 +0000

the same is true for government policies or programs - those are also likely to push mortgage rates lower short-term

at the very least, extended government guarantees synthetically reduce the risk - the US government is a more trusted backer than the issuer of the MBS

📖 Quoted from 2025-09-19 22:08
https://illya.sh/thoughts/mortgage-rates-targeted-qe-such-as-the-mass-purchase-of
mortgage-rates targeted QE, such as the mass purchase of mortgage backed securities (MBS) by the Fed will drive the mortgage yields down short-term, but also further leverage that market sector in the process

of course, that doesn't resolve the underlying supply/demand imbalance at the risk level implied…

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 21:18:05 +0000

of course, that doesn't resolve the underlying supply/demand imbalance at the risk level implied by the leverage

so the bubble is still there, and eventually it will eventually pop

📖 Quoted from 2025-09-19 22:11
https://illya.sh/thoughts/the-same-is-true-for-government-policies-or-programs-those
the same is true for government policies or programs - those are also likely to push mortgage rates lower short-term

at the very least, extended government guarantees synthetically reduce the risk - the US government is a more trusted backer than the issuer of the MBS

the US mortgage bubble will likely pop alongside other bubbles, due to a high degree of…

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 21:27:45 +0000

the US mortgage bubble will likely pop alongside other bubbles, due to a high degree of interdependence and correlation within the financial sector

the mortgage bubble can both, trigger and be triggered by burst of other bubbles

so you'll see a cross-border systemic downturn

📖 Quoted from 2025-09-19 22:18
https://illya.sh/thoughts/of-course-that-doesnt-resolve-the-underlying-supply-demand
of course, that doesn't resolve the underlying supply/demand imbalance at the risk level implied by the leverage

so the bubble is still there, and eventually it will eventually pop

so as a takeaway: expect volatility within the mortgage rates in the US

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 21:31:46 +0000

so as a takeaway: expect volatility within the mortgage rates in the US

➖ upwards pressure: financial downturns in other sectors, organic de-leveraging

➖ downwards pressure: QE, Fed facilities, government policies

📖 Quoted from 2025-09-19 22:27
https://illya.sh/thoughts/the-us-mortgage-bubble-will-likely-pop-alongside-other
the US mortgage bubble will likely pop alongside other bubbles, due to a high degree of interdependence and correlation within the financial sector

the mortgage bubble can both, trigger and be triggered by burst of other bubbles

so you'll see a cross-border systemic downturn

while the mortgage will eventually bubble pop/de-leverage to a significantly lower level, it's…

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 21:35:45 +0000

while the mortgage will eventually bubble pop/de-leverage to a significantly lower level, it's unlikely to happen within the next year or two, as many seem to suggest

as I've written here - there are still many tools that can push mortgage rates down shorter-term

📖 Quoted from 2025-09-19 22:31
https://illya.sh/thoughts/so-as-a-takeaway-expect-volatility-within-the-mortgage-rates
so as a takeaway: expect volatility within the mortgage rates in the US

➖ upwards pressure: financial downturns in other sectors, organic de-leveraging

➖ downwards pressure: QE, Fed facilities, government policies

but definitely expect volatility 😄

hello@illya.sh (Illya Gerasymchuk) — Fri, 19 Sep 2025 21:36:02 +0000

but definitely expect volatility 😄

📖 Quoted from 2025-09-19 22:35
https://illya.sh/thoughts/while-the-mortgage-will-eventually-bubble-pop-de-leverage-to
while the mortgage will eventually bubble pop/de-leverage to a significantly lower level, it's unlikely to happen within the next year or two, as many seem to suggest

as I've written here - there are still many tools that can push mortgage rates down shorter-term

September 2025 FOMC dot plot suggests lower rates than in June 2025

hello@illya.sh (Illya Gerasymchuk) — Sat, 20 Sep 2025 13:05:36 +0000

September 2025 FOMC dot plot suggests lower rates than in June 2025

the new implied median for end of 2025 is ≈3.6%, which is lower than the ≈3.9% June figure

this means you should expect the Fed to cut another 50 bps/0.5% in the next 3 months - likely in two 25bps iterations

📖 Quoted from 2025-09-17 09:10
https://illya.sh/thoughts/how-will-asset-prices-react-to-feds-interest-rate-decision
how will asset prices react to Fed's interest rate decision?

if the FOMC members suggest rates lower than in the June 2025 - expect an upwards rally in assets

if the FOMC members suggest higher or non-decreasing near future rates - expect a downward rally/profit taking in assets

the market reacted exactly as I anticipated in a prior post

hello@illya.sh (Illya Gerasymchuk) — Sat, 20 Sep 2025 13:24:16 +0000

the market reacted exactly as I anticipated in a prior post

a lower median in the FOMC dot plot indeed pushed asset prices up. and you had plenty of time after the Fed's dot plot was published to enter into that leg

look at gold, silver and S&P500 😄

📖 Quoted from 2025-09-20 14:05
https://illya.sh/thoughts/september-2025-fomc-dot-plot-suggests-lower-rates-than-in
September 2025 FOMC dot plot suggests lower rates than in June 2025

the new implied median for end of 2025 is ≈3.6%, which is lower than the ≈3.9% June figure

this means you should expect the Fed to cut another 50 bps/0.5% in the next 3 months - likely in two 25bps iterations

$4000/oz gold by the end of 2025? yes, very much possible, but also beware of consolidation ranges…

hello@illya.sh (Illya Gerasymchuk) — Sat, 20 Sep 2025 17:00:17 +0000

$4000/oz gold by the end of 2025? yes, very much possible, but also beware of consolidation ranges which may extend for months

the remaining ≈50bps of rate cuts this year are very much in the process of being priced-in

moreover the USD isn't likely to strengthen significantly over the next 3 months

and additional liquidity will be injected from US, China, EU, Japan & others

all positive price pressure on gold

the question isn't wether gold will hit $4000 (it will!), but wether it will reach that price in the next 3 months. it could also settle in a consolidation range with the top just below $4K

remember that December is the tax year end pretty much worldwide, so balance sheets will be re-organized. US Treasury will also be running auctions on notes and bills every month until the end of 2025. and that collateral is needed by the wholesale debt markets/money market funds, so it will be bought up. these two could put downward pressure on the price of gold within the next 3 months

within the next 8 months gold will almost certainly reach $4000. so if it doesn't happen by December 31st 2025, it will be soon after

i'we written out my gold price thesis extensively in my previous posts, and closely followed the previous consolidation. you can read that to understand how to interpret data from price pressure, global liquidity and technical analysis standpoint

i will eventually cover these points in more detail, so stay tuned to future posts

lower interest rates means less attractive repo and deposit rates, thus expect more capital…

hello@illya.sh (Illya Gerasymchuk) — Sun, 21 Sep 2025 16:12:59 +0000

lower interest rates means less attractive repo and deposit rates, thus expect more capital movement into assets, as the yields on MMF/deposits become less attractive

overall positive pressure on asset prices

for the next 3 years - gold, silver and real estate (real estate is more region specific) are great assets to hold

i'd be wary of US equities

while it's not the top yet and they'll still move higher - you need to be on the lookout the cycle top, which will manifest in some form in the medium long-term

in the next two years it's reasonable to expect a significant downturn in US equities, which may or may not be longer-lasting. it largely depends on the specific QE & other government policies taken to modulate liquidity and yields

so if you're heavily exposed to US equities, it's a good idea to monitor it closely, as there's a risk of a significant downturn

the biggest downside risk to US equities comes from FX, namely from the value and dominance of the US dollar:

➖ while a weaker USD is positive for cross-border USD credit/liquidity, it also makes imports more expensive for the US - and US is a net importer. increased import prices will put negative pressure on the whole economy, including publicly-traded companies

➖ less dominance/demand of USD will not only lead to less total USD abroad available to invest into the US equities, but also lead to the further development of non-USD financial markets because the capital that moves away from USD will need to get invested somewhere. China is the most obvious candidate to benefit from these developments, especially when it comes to equities and renminbi demand. i believe the EU is in a unique position to attract a lot of that USD-exiling demand, but that would require opening-up the markets and regulatory adaptations in that direction

US government's intervention into the private sector like with NVIDIA and Intel is negative for US…

hello@illya.sh (Illya Gerasymchuk) — Mon, 22 Sep 2025 09:02:44 +0000

US government's intervention into the private sector like with NVIDIA and Intel is negative for US equities long-term

it makes the stock market even more exposed to US government credit risk and the overall USD dominance

short-term the price goes up, but so does the leverage

real estate/land has been used as a store of value for as long as we have written records - at…

hello@illya.sh (Illya Gerasymchuk) — Mon, 22 Sep 2025 09:58:01 +0000

real estate/land has been used as a store of value for as long as we have written records - at least 5000 years 😄

even 5K years ago lad had been owned, taxed, transferred, leased and used as collateral

physical space is limited and virtually everybody needs a house/shelter. this has been true for hundreds of thousands of years and it won't become a lie anytime soon

so yes, real estate/land will continue to be used as a store of value

silver's current move is already up >25%. it's better to have a pullback somewhere around the…

hello@illya.sh (Illya Gerasymchuk) — Mon, 22 Sep 2025 19:01:08 +0000

silver's current move is already up >25%. it's better to have a pullback somewhere around the current level

it can move up even further, extending the total move to ≈60%, but then you’ll get a larger and longer lasting pull back

when silver moves in smaller increments, it has shorter-lasting consolidations/pullbacks. so this is what i mean by "better"

gold moves up by ≈13% on breakouts, thus ≈$4000/oz gold in November 2025

hello@illya.sh (Illya Gerasymchuk) — Tue, 23 Sep 2025 08:36:15 +0000

gold moves up by ≈13% on breakouts, thus ≈$4000/oz gold in November 2025

this means that the current move would bring the gold price up to ≈$3978, which should happen at the start of November, around November 4th 2025

so far, gold has completed ≈6% of the current move - which means there's another ≈7% to move up from the current gold price of ≈$3715

this makes ≈$4000 the top of the next consolidation range. once that price is approached - expect a larger pullback, and potentially a longer consolidation phase, which could last ≈90 days. this means that after the top of the current move is hit (≈$4000) you may have to wait for another ≈3 months before a new all time high

it's important to note that the top of the target range is close to $4000, so gold may not cross $4K before the aforementioned pullback. this means that it may take gold another 4 months before gold firmly sits over $4000/oz

expect silver to correct down by ≈18%

hello@illya.sh (Illya Gerasymchuk) — Tue, 23 Sep 2025 19:03:31 +0000

expect silver to correct down by ≈18%

if the correction starts at the current level, that would bring the price down to ≈$36.22

but you may want to place orders above if you want to enter, somewhere from $37.5

silver's key short-term trend support is the green light from the chart

hello@illya.sh (Illya Gerasymchuk) — Tue, 23 Sep 2025 23:45:55 +0000

silver's key short-term trend support is the green light from the chart

we can only talk about potential pullbacks or consolidations once it's broken

watch it closely 👀

So the US government funds & contracts OpenAI, buys 10% of Intel, gets a stake in NVIDIA and…

hello@illya.sh (Illya Gerasymchuk) — Wed, 24 Sep 2025 08:50:02 +0000

So the US government funds & contracts OpenAI, buys 10% of Intel, gets a stake in NVIDIA and places Oracle to oversee TikTok

Then, these companies invest one into another

That’s a bubble within a bubble 🤯

silver and gold move differently, which why I generally refrain from referring to these…

hello@illya.sh (Illya Gerasymchuk) — Wed, 24 Sep 2025 11:44:03 +0000

silver and gold move differently, which why I generally refrain from referring to these commodities in conjunction, even though a lot of what I write about gold also applies to silver

both, gold and silver are currently great investments, but they exhibit a different risk profile

silver is a lot more volatile, meaning its moves are amplified in both directions

if you’re planning to hold in the treasury/balance sheet it can play a big difference, as you’ll generally be less liquid with your silver holdings - in the sense that you may find it in a significant pullback from a previous high if you try to liquidate it ad-hoc, especially short-term

(silver) a breakdown below the bottom orange line will likely push the price further down, at…

hello@illya.sh (Illya Gerasymchuk) — Wed, 24 Sep 2025 13:46:23 +0000

(silver) a breakdown below the bottom orange line will likely push the price further down, at least to ≈$43.35

so now, watch the orange trend line/triangle 👀

1h candles

📖 Quoted from 2025-09-24 00:45
https://illya.sh/thoughts/silvers-key-short-term-trend-support-is-the-green-light-from
silver's key short-term trend support is the green light from the chart

we can only talk about potential pullbacks or consolidations once it's broken

watch it closely 👀

added RSS feed to illya's threads/articles: https://illya.sh/threads/feed.xml

hello@illya.sh (Illya Gerasymchuk) — Wed, 24 Sep 2025 18:25:27 +0000

added RSS feed to illya's threads/articles: https://illya.sh/threads/feed.xml

so now you can subscribe my longer-form articles directly in your RSS reader

previously, there was only a web version at https://illya.sh/threads/

hello@illya.sh (Illya Gerasymchuk) — Wed, 24 Sep 2025 19:09:43 +0000

previously, there was only a web version at https://illya.sh/threads/

now there is also RSS, just like for illya's thoughts

📖 Quoted from 2025-09-24 19:25
https://illya.sh/thoughts/added-rss-feed-to-illyas-threads-articles-https-illya-sh
added RSS feed to illya's threads/articles: https://illya.sh/threads/feed.xml

so now you can subscribe my longer-form articles directly in your RSS reader

illya's threads & illya's thoughts are also on substack

hello@illya.sh (Illya Gerasymchuk) — Wed, 24 Sep 2025 19:16:14 +0000

illya's threads & illya's thoughts are also on substack

i don't actively use substack, but i also import my thoughts & threads RSS feeds there

illya's threads on substack: https://illyathreads.substack.com/

illya's thoughts on substack: https://illyathoughts.substack.com/

in a 6 months timeline, gold's current price dip is a buying opportunity

hello@illya.sh (Illya Gerasymchuk) — Wed, 24 Sep 2025 19:35:53 +0000

in a 6 months timeline, gold's current price dip is a buying opportunity

even if silver goes down to $30/oz it will still be in an uptrend 🤯

hello@illya.sh (Illya Gerasymchuk) — Thu, 25 Sep 2025 11:41:06 +0000

even if silver goes down to $30/oz it will still be in an uptrend 🤯

(weekly chart)

my article on repo rates and BTC price was referenced on bitcoin.com

hello@illya.sh (Illya Gerasymchuk) — Thu, 25 Sep 2025 19:12:06 +0000

my article on repo rates and BTC price was referenced on bitcoin.com

apparently it's been there for a month, but i only noticed now

it's a short read - and explains the negative price pressure that quarter-ends, and especially September bring on the price of liquidity sensitive assets like Bitcoin

it give you a concrete perspective on the current cryptocurrency price dump, even with decreasing funding rates

you can read the full article/thread explaining why September is generally a bad month for Bitcoin…

hello@illya.sh (Illya Gerasymchuk) — Thu, 25 Sep 2025 19:20:06 +0000

you can read the full article/thread explaining why September is generally a bad month for Bitcoin and other cryptocurrencies here: https://illya.sh/threads/@1755867104-1.html

📖 Quoted from 2025-09-25 20:12
https://illya.sh/thoughts/my-article-on-repo-rates-and-btc-price-was-referenced-on
my article on repo rates and BTC price was referenced on bitcoin.com

apparently it's been there for a month, but i only noticed now

it's a short read - and explains the negative price pressure that quarter-ends, and especially September bring on the price of liquidity sensitive assets like Bitcoin

it give you a concrete perspective on the current cryptocurrency price dump, even with decreasing funding rates

How Banks Create Money When Purchasing Assets

hello@illya.sh (Illya Gerasymchuk) — Fri, 26 Sep 2025 19:41:54 +0000

How Banks Create Money When Purchasing Assets

I have previously written about the unique legal powers given to commercial banks and credit institutions in general, that allow them to create new currency, thus increasing its supply. For banks, this also extends to their open market operations, such as when they buy securities and other assets from the open market. If the bank’s counterparty happens to be a non-bank, or more generally an entity without an account at the central bank, then the bank will create new currency to pay for that transaction. I described this in my thread/article titled "when a bank buys an asset from a non-bank it creates broad money":
https://illya.sh/threads/@1755863018-1.html

I received a question about it via e-mail, so I’m writing a follow-up with clarifications.

The flow that I was describing the thread linked above is what happens when a bank buys an asset from a non-bank. Let’s assume the bank ABC wants to buy an asset from you. Let’s forget about US government bonds for now, let’s say the bank wants to buy 100 shares of Tesla from you. The current market price for 1 Tesla share is ≈$450, so the ABC bank would pay you $45000 and you will give the bank the 100 shares. Let’s also assume you have an account in that bank (this is not mandatory!)

Let’s say that right before the bank makes a purchase from you (a microsecond before that transaction/sale happens) there is a total of $1 million ($1000000) of US dollars in circulation. The moment right after the transaction is made, and the bank crediting your account with $45000, the total money in circulation would become $1 000 000 + $45000 = $1 045 000. The main point here is that those $45000 didn’t exist in circulation before. They were not taken from someone else’s account, nor from internal bank reserves. Those $45000 were created “out of thin air”, and that money was credited into your account. I say “credited” because it’s from the point of view of the bank - your deposit account at the bank is a liability to the bank - it sits on the liabilities side of the balance sheet - a credit increases liabilities.

Now, I referred to “money in circulation”, but I actually meant Broad Money. There is another form of money - called Broad Money. There is a great paper from the Bank of England that describes them, alongside how commercial banks create money: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf . But in short, Broad Money is the money available for use by the larger economy (individuals, companies, etc), while Base Money is physical currency and currency held in reserve accounts at the central bank - the reserve accounts portion doesn’t touch the broader economy directly.

If instead a bank ABC purchases an asset from another bank DEF - then the total money does not change. The bank ABC would just debit their reserve account at the central bank and credit the reserve account of the bank DEF. So money moves accounts, but total quantity does not change.

In the same manner, when a commercial bank buys bonds directly from the government, there is no creation of “new money” - the money moves within the central bank’s reserve accounts. The general rule is: if the transacting entities have reserve accounts in the central bank the transaction is made within the central bank’s reserve accounts. Commercial banks, governments and sometimes select financial institutions (like in the US) have reserve accounts at the central bank, so transactions within them move Base Money

The following article on how commercial banks work will be very helpful to understand how they operate and create money: https://illya.sh/threads/@1754426330-1

when mega caps like gold explode by ≈50% in a year and you don't think that that's a warning sign…

hello@illya.sh (Illya Gerasymchuk) — Fri, 26 Sep 2025 23:08:32 +0000

when mega caps like gold explode by ≈50% in a year and you don't think that that's a warning sign for US equities/risk asset - you probably should look back at history 😄

Bitcoin and Intel have do have one thing in common - direct monetary intervention from the US government

portugal golden visa real estate investments are less than 3% of total housing transactions

hello@illya.sh (Illya Gerasymchuk) — Sat, 27 Sep 2025 10:19:05 +0000

portugal golden visa real estate investments are less than 3% of total housing transactions

portuguese real estate market volume is ≈30B€/year, golden visa purchases accounted for ≈556M€/year

3% of total volume of the housing market is unlikely to be the primary driver of the national median prices increase

so next time someone tells you that one of the main drivers behind increasing Portuguese real estate prices are golden visa investments - their argument is likely to lack substance

virtually every corporation that accepts Ethereum/Bitcoin for payments doesn't actually process…

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Sep 2025 14:40:39 +0000

virtually every corporation that accepts Ethereum/Bitcoin for payments doesn't actually process the payment in crypto

they immediately covert it to USD or another FIAT, and not actually hold the BTC, ETH, etc

the convertion is generally done via an intermediary, so the company you're buying never even touch or care about the crypto asset. they want the same government-backed currencies that we use now

the intermediary will also generally charge a fee, around ≈1% of the transaction value. so buying directly with crypto is likely to be more expensive than directly with FIAT. if you just sell the crypto for FIAT and pay directly in USD, EUR, etc it will likely be cheaper. so what's the point of paying more?

don't be fooled by headlines or articles that suggest otherwise

central banks have rejected holding Bitcoin in their reserves including Fed, ECB, PBoC and many…

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Sep 2025 16:43:20 +0000

central banks have rejected holding Bitcoin in their reserves including Fed, ECB, PBoC and many others

what would even be the purpose of a central bank holding BTC on their balance sheet? so that they can stabilize the value of the currency against Bitcoin? what would be the practical benefit from it now?

cross-border crypto trade in non-stablecoins is negligible. Bitcoin is extremely volatile, which would make central-bank issued currency more volatile - this goes exactly against the direct mandate of most central banks - price stability.

a more volatile currency will also lead to a more volatile bond market, which will make government funding more volatile, and thus a high risk/uncertain economy

and i'm not even going to touch on the security risks. okay, maybe briefly 😄:

➖ governments are one of the only entities that can realistically perform a successful 51% attack on Bitcoin. well, with central banks owning BTC will make such attacks much more attractive - including at the geopolitical level. the same goes for denial of service family of attacks

➖ what if the central bank's wallets get hacked/compromised? i'm not talking about quantum computers breaking RSA, but operational level mistake or compromise

so for the next 10 years, I view central banks holding Bitcoin on their balance sheet as a negative sign for their currency. of course, the protocol and the bitcoin network will evolve/change over time, and with so may my stance

i believe cryptocurrencies, and more specifically distributed layer technologies/blockchain architectures can bring immense value to our financial system as a whole, but that doesn't mean that we should have central banks speculating on that today. it makes much more sense to increase gold reserves instead

if you buy a car with Bitcoin, you're still subject to capital gains tax

hello@illya.sh (Illya Gerasymchuk) — Sun, 28 Sep 2025 17:07:07 +0000

if you buy a car with Bitcoin, you're still subject to capital gains tax

under the US law cryptocurrencies are property - so you're taxed on the USD value of the car at the time of purchase minus the cost of your original crypto purchase (so you're only taxed on the gain/profit)

so if the processing fee of a payment with Ethereum is larger than it would be by selling Ethereum for USD first (e.g. transfer ETH to an exchange --> sell --> transfer to your bank account), then you end up paying more with Ethereum than you would with USD. it make sense, because you'd be removing an intermediary (i.e. you sell ETH for USD yourself)

in either case, the seller receives USD for the car, not ETH or BTC. the intermediary most likely doesn't keep ETH/BTC on their balance sheet either, they just proxy your order to the market and charge a spread

the majority of real estate purchases in Portugal are done with credit. moreover, each property…

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Sep 2025 08:54:31 +0000

the majority of real estate purchases in Portugal are done with credit. moreover, each property itself can be used as a collateral to get more credit - at least 75% of the property's value. so not only you can purchase the property, earn a yield via rents, but also get a credit/loan for 75% of value of the property

in Portugal, ≈90% of all credit/loans against real estate, go into investing into more real estate. so each collateraized property, can contribute ≈2x of its value as buying pressure for the real estate market as a whole (1x when the property is first purchased, and 0.75x-1x when the property is used as collateral to get a loan against it)

so effectively real estate itself is driving real estate prices up. banks happily finance real estate acquisitions, and lend against real estate collateral. then, most of that credit goes into purchasing more real estate, thus pushing the prices up

so the main drivers behind increasing real estate prices in Portugal are:

the real estate itself, i.e. the property itself
funding rate/cost of credit (highly influenced by ECB policy rates)
low relative transaction volume/market cap, making it easier to move the median

the first two points are generally universal across the globe. i've previously written an article about what makes real estate such a special asset from the point of view of financing. you can read it here: https://illya.sh/threads/@1757632740-1.html

the relatively low total transactional volume, which has increased almost x3 in the past decade - makes it "easier" for buying pressure to push the housing prices up

of course, other factors contribute as well. Portugal is highly demanded area for cultural and geographical reasons - i.e. locals are welcoming and Portugal has a huge coastal area. there is also high inflation, regulatory challenges and supply chain limitations

the bottom line is that real estate purchase and rent prices in Portugal will continue to increase over medium-long term

📖 Quoted from 2025-09-27 11:19
https://illya.sh/thoughts/portugal-golden-visa-real-estate-investments-are-less-than-3
portugal golden visa real estate investments are less than 3% of total housing transactions

portuguese real estate market volume is ≈30B€/year, golden visa purchases accounted for ≈556M€/year

3% of total volume of the housing market is unlikely to be the primary driver of the national median prices increase

so next time someone tells you that one of the main drivers behind increasing Portuguese real estate prices are golden visa investments - their argument is likely to lack substance

ILLYA GERASYMCHUK: "There are 60M millionaires and only 281M kg of gold. Do the math"

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Sep 2025 14:13:05 +0000

ILLYA GERASYMCHUK: "There are 60M millionaires and only 281M kg of gold. Do the math"

the vast majority, if not all of tariffs set be the US will be removed in the next 4 years

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Sep 2025 14:32:37 +0000

the vast majority, if not all of tariffs set be the US will be removed in the next 4 years

latest - by the next US administration. it will be an easy way to mitigate price inflation a bit, and mobilize the overall US economy

tariffs are a net negative - i've said it from the very start. it's a lot more obvious now

silver's current short-term support line is in green

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Sep 2025 23:19:22 +0000

silver's current short-term support line is in green

it will be touched soon

watch it closely!

and there you go 😄

hello@illya.sh (Illya Gerasymchuk) — Tue, 30 Sep 2025 09:23:42 +0000

and there you go 😄

once the short-term suport line was broken, silver's price fell down to another support

📖 Quoted from 2025-09-30 00:19
https://illya.sh/thoughts/silvers-current-short-term-support-line-is-in-green
silver's current short-term support line is in green

it will be touched soon

watch it closely!

Bitcoin is not a good collateral for a loan, here's why:

hello@illya.sh (Illya Gerasymchuk) — Tue, 30 Sep 2025 09:57:11 +0000

Bitcoin is not a good collateral for a loan, here's why:

1️⃣ You can only get ≈50% LVT credit
2️⃣ You pay higher interest than on mortgages/real estate-backed loans
3️⃣ You get liquidated from ≈80% LVT

So if your strategy is to purchase assets and use them as collateral for loans, you may be better off with real estate:

1️⃣ You can get more than 75% LTV credit
2️⃣ You'll pay lower interest for a mortgage/real estate-collateralized loan than for a BTC collateralized loan
3️⃣ No liquidations when real estate is collateral. If property (collateral value) falls, you may be requested a cure, but forced sales must go though courts.

no, "The West" is not manipulating gold and silver prices

hello@illya.sh (Illya Gerasymchuk) — Wed, 01 Oct 2025 10:18:24 +0000

no, "The West" is not manipulating gold and silver prices

silver and gold had retracements many times before, but I guess when it falls on Chinese holidays it becomes "western manipulation"?

≈32% of global gold demand in 2025 comes from China (estimate for jewelry + bar & coin). China is a major buyer of gold - so a lot of demand there

a more reasonable explanation is a demand dip, due to the holiday in PRC. also the US government shutdown. although I agree the idea of a magic red button saying DUMP GOLD located somewhere in the west is more exciting 😄

it's also not clear what would be the purpose of manipulating the price of gold down, as that would be benefiting China - they can buy it cheaper!

PBoC has been buying gold for years, and they will continue to do so. PBoC doesn't announce targets publicly - and they're flexible on their purchases, so again, lowering the gold price would likely allow them to buy it at a cheaper price

we are approaching a local top for silver and gold according to my market vibe meter

hello@illya.sh (Illya Gerasymchuk) — Fri, 03 Oct 2025 18:58:08 +0000

we are approaching a local top for silver and gold according to my market vibe meter

usually i'd write a longer post with an explanation & technicals, but today i'm writing of off vibes 😄

my twitter/x feed has been filled with so much euphoria regarding silver & gold that it starts to resemble those accounts which constantly promote Bitcoin

you also have to contextualize how extended gold and silver's moves have been. the graph shows monthly candles

this isn't a bearish post on gold though - still expecting $4000/oz in November 2025 😄

decentralized digital Euro will not work, because the ECB needs to have full control over it

hello@illya.sh (Illya Gerasymchuk) — Sat, 04 Oct 2025 12:40:25 +0000

decentralized digital Euro will not work, because the ECB needs to have full control over it

retail CBDCs are direct central bank liabilities on the balance sheet. so "neutral market infrastructure" would not work, because the ECB needs to have full control over it. you can also imagine how many regulations need to be accounted for by the implementation

it most likely won't use a public blockchain for base implementation, and it's definitely not like stablecoins 😄

digital euro also needs to support offline payments, which isn't currently widely supported in DeFi. Zero Knowledge Proofs enable some potential solutions for this, but I don't believe that that's with what the ECB is going with now

people are calling Christine Lagarde ignorant on Bitcoin, but don't explain how

hello@illya.sh (Illya Gerasymchuk) — Wed, 08 Oct 2025 15:31:18 +0000

people are calling Christine Lagarde ignorant on Bitcoin, but don't explain how

how exactly are her statements on Bitcoin ignorant? it's not nice to insult someone, and it certainly doesn't explain how Bitcoin has the same amount and class of intrinsic value as gold - a commodity that has been money for over 5K years

what is even the purpose of a central bank holding BTC in their balance sheet today? speculative investments are not a part of their mandates and moving in that direction would be contradictory to their legally established goals

commercial banking is not the same as central banking

neither supply nor demand are static

hello@illya.sh (Illya Gerasymchuk) — Wed, 08 Oct 2025 20:18:22 +0000

neither supply nor demand are static

if you renew a building in a high demand area you're removing an abandoned/old property from an area, which makes the area "nicer", thus it becomes more attractive = more demand

you're also probably will be renting more than the area average (it's a new construction now)

imagine doing this in an almost central part of a high demand city

so renting a building can actually bring prices in the area up instead of down

still - more building is better!! it does put downwards pressure on the real estate prices - but you're looking in the wrong place. you should be looking at credit instead. i wrote an article to get you started here: https://illya.sh/threads/@1757632740-1.html

≈less than 50% of total land is buildable

hello@illya.sh (Illya Gerasymchuk) — Wed, 08 Oct 2025 20:58:53 +0000

≈less than 50% of total land is buildable

this is if you want to be accurate for the near-long future

don't expect massive building in mountains, glaciers and deserts 😄

no, permissioned assets running on blockchains are NOT sheep in wolves' clothing

hello@illya.sh (Illya Gerasymchuk) — Fri, 10 Oct 2025 01:15:55 +0000

no, permissioned assets running on blockchains are NOT sheep in wolves' clothing

blockchains need to integrate with our existing legal systems - and the permissioned aspect is often required by law

i'm currently looking into implementing a real estate European Long Term Investment Fund (ELTIF) on-chain with smart contracts

the EU regulations governing such funds explicitly require a permissioned control. for example, an ELTIF must be managed by an Alternative Investment Fund Manager (AIFM), as per Directive 2011/61/EU (AIFMD). so there must always be an AIFM behind the token/smart contacts. it can't just be "ownerless" decentralized contracts. by design that someone also bears legal responsibility

you're also legally not allowed to allow retail investments into the fund without KYC, which is also a permissioned component

in order to be able to have the unit's funds tradable on-chain without qualifying as a trading venue under MiFID II (so you don't need additional licenses), you may want to use ELTIF RTS, which under certain conditions exempt your ELTIF smart contracts from being classified as a multilateral system. to qualify for this exception, the law requires the manager to operate windows, decide on execution prices, etc - i.e. the fund's units get traded in a permissioned manner

these are just some of practical examples. as you see, there are many reasons for using a permissioned design in your blockchain assets

permissionless is great, but practical value is more important. we need more solutions that work with the existing legal and financial system infrastructure

FYI you can ask the bank to lend you ≈75%LTV of the future property before restoration works start

hello@illya.sh (Illya Gerasymchuk) — Sun, 12 Oct 2025 16:15:05 +0000

FYI you can ask the bank to lend you ≈75%LTV of the future property before restoration works start

so assuming you have a real estate project for restoration - the bank estimates the future value (after the immovable property is restored) and lends ≈75% of that expected future value. if you lease the property instead of buying - banks can generally finance 100%

in restoration projects the bank may also agree for a lower installment payment schedule while the works are ongoing/the property business is being setup - e.g. for the first two years of the loan you're only paying interest installment portion without amortizing the outstanding principal amount

otherwise you'll need another way to finance the restoration costs, and I doubt the contracting company will agree to only receive payment once your loan gets approved

deep work in loud, distracting places is a skill that you can learn

hello@illya.sh (Illya Gerasymchuk) — Fri, 17 Oct 2025 21:09:45 +0000

deep work in loud, distracting places is a skill that you can learn

and it's a very useful skill

now crypto twitter seems to think that gold & silver have topped 😂

hello@illya.sh (Illya Gerasymchuk) — Fri, 17 Oct 2025 21:22:09 +0000

now crypto twitter seems to think that gold & silver have topped 😂

i don't think CT understands what gold & silver are

1. Bitcoin is not money. Calling it money won't make it money

hello@illya.sh (Illya Gerasymchuk) — Sat, 18 Oct 2025 10:28:02 +0000

1. Bitcoin is not money. Calling it money won't make it money

2. Digital currency designs existed before bitcoin - and double spending wasn't an unsolvable problem

3. Again, bitcoin is not money and all it takes is for your government to declare it illicit to censor it. Bitcoin is not private - you will be tracked if needed & in many ways it's much easier than with banks

I'm a big fan of Bitcoin, DeFi & crypto in general, but that doesn't mean reality should be skewed

Remember that lot of accounts posting non-stop pro-BTC/crypto content are paid for it - directly or indirectly. Another large portion of them are automated/bots.

Keep it real 😎

BTC went from $0.004 to $110,000 USD in 16 years, but gold was never this cheap in over 5000 years

hello@illya.sh (Illya Gerasymchuk) — Sat, 18 Oct 2025 12:28:03 +0000

BTC went from $0.004 to $110,000 USD in 16 years, but gold was never this cheap in over 5000 years

Going back to the start of recorded price systems - gold's starting price per gram is ≈100 days of labor! This was in 2112 BCE, which was ≈4K years ago

So using earliest records of starting price - 1g of gold would cost ≈25K$ is today's USD 🤯 NOTE: this is an imprecise estimation - but it's useful to bring the gold vs bitcoin price increase argument in perspective. During most of gold's USD history its price has been fixed by the government/law.

Will Bitcoin be here in 5K years? No - not in its current form. Gold (Au) hasn't changed in 13 billion years

Bitcoin promo accounts love to compare BTC to gold, and they frequently cite that BTC is up much more than gold over the last 16 years. The number is big - from its inception Bitcoin is up millionth of percent

What the pro-crypto accounts fail to point out is that mathematically their conclusions are misleading. They almost always use USD as the base currency for comparison, but ignore the fact that gold was used as money several millennia before U.S. was even conceived. As such, such comparisons fail short

They also seem to selectively omit the massive volatility - gold doesn't go down 80% every other day/cycle top

The gold prices here I computed are estimates - don't take them as hard quantitive data. Read this in the context of comparing the price of gold and Bitcoin. If someone's argument is that Bitcoin is better than gold because it had a higher percentual return in 16 years - it likely lacks substance

sell your gold and buy Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Sat, 18 Oct 2025 13:30:05 +0000

sell your gold and buy Bitcoin

dealers/market makers need exit liquidity

central banks need a lower purchase price

you've been warned! 😄

governments are already converting from physical currencies to digital currencies

hello@illya.sh (Illya Gerasymchuk) — Sat, 18 Oct 2025 14:30:42 +0000

governments are already converting from physical currencies to digital currencies

and it makes sense - it's cheaper, more traceable and more controllable. digital currencies are programmable - purely physical are not

i wrote a thread about how virtually central banks are moving to digital currencies - via retail & wholesale CBDCs:
https://illya.sh/threads/@1756336264-1.html

my vibe meter on Bitcoin is off the charts 📈*

hello@illya.sh (Illya Gerasymchuk) — Sun, 19 Oct 2025 13:12:43 +0000

my vibe meter on Bitcoin is off the charts 📈*

the algorithm on X has been pushing a lot of pro-BTC content over the past month, and it's becoming more and more irrational:

accounts with millions of followers recycling 2024 news about "new" gold reserves in China, false news about China legalizing Bitcoin and calls for gold going down to $2000

every pro-Bitcoin account seems to be calling a long-term gold top (LOL!) and heavy rotation into Bitcoin. actually a lot of BTC shill content is about BTC being better than gold - and the arguments for it aren't very sound. i've written several posts explaining this. BTC crowd seems very obsessed about gold - especially when it comes to showing how it's inferior to Bitcoin. Bitcoin is not gold - and it will never be gold - they're very different assets. that doesn't mean that BTC ownership is a bad idea - but it's important important to approach it rationally

a large part of this seems coordinated/paid campaigns. liquidity always needs an exit

so Bitcoin should continue with some more downside in the near future

* this sentiment is based on vibes, but it's backed by technicals & fundamentals at its base. you can find in-depth explanations in my past posts and threads

hope you enjoyed Friday's gold, silver & miners sell-off

hello@illya.sh (Illya Gerasymchuk) — Sun, 19 Oct 2025 18:08:09 +0000

hope you enjoyed Friday's gold, silver & miners sell-off

now await for the markets to re-open

it begins in a few hours 👀

looks like crypto twitter has not discovered Mendeleev's periodic table yet 😂

hello@illya.sh (Illya Gerasymchuk) — Sun, 19 Oct 2025 22:16:40 +0000

looks like crypto twitter has not discovered Mendeleev's periodic table yet 😂

gold has existed for ≈13 billion years

for at least 5,000 of those 13,000,000 years it has been money

authenticity of gold bars can be tested easily. no need to make up problems that don't exist

it's not about lowering gold

hello@illya.sh (Illya Gerasymchuk) — Sun, 19 Oct 2025 22:52:10 +0000

it's not about lowering gold

and nobody is panicking

pro-crypto shill is about gold now because gold has has been the most notable asset post-interest rate cuts by the Fed

not long ago it was about dumping ETH for BTC, and by default it's about inflation/currency debasement

gold has been impressive. but this is very expected. during gold's last consolidation i've written extensively about how it's setting up very strong support and will make the uptrend continuation even more decisive. every dip was indeed a buying opportunity

Bitcoin isn't private - at best it's anonymous

hello@illya.sh (Illya Gerasymchuk) — Sun, 19 Oct 2025 23:43:45 +0000

Bitcoin isn't private - at best it's anonymous

and this is by design. it's just cryptography/math - not much to argue about

but gold transactions aren't private either. most of the time they're not even anonymous. you must have some level of trust with the counterparty - either directly or via intermediary. a lot of the times this is required by law

at retail level, there is much more privacy and anonymity with Bitcoin that with gold

gold has clearly more intrinsic value than bitcoin, but bitcoin is one of the most significant advancements in money. although bitcoin isn't money 😄

yes, you always have access to the Bitcoin network

hello@illya.sh (Illya Gerasymchuk) — Sun, 19 Oct 2025 23:54:22 +0000

yes, you always have access to the Bitcoin network

until the electric grid is disrupted, a sufficiently strong solar storm occurs, a denial of service attack happens, ...

i can continue the list

⏰ don't forget to setup your buy limit orders for gold, silver and their miners

hello@illya.sh (Illya Gerasymchuk) — Mon, 20 Oct 2025 00:44:12 +0000

⏰ don't forget to setup your buy limit orders for gold, silver and their miners

📖 Quoted from 2025-10-19 19:08
https://illya.sh/thoughts/hope-you-enjoyed-fridays-gold-silver-miners-sell-off
hope you enjoyed Friday's gold, silver & miners sell-off

now await for the markets to re-open

it begins in a few hours 👀

the promised gold & silver sale is here

hello@illya.sh (Illya Gerasymchuk) — Tue, 21 Oct 2025 11:20:25 +0000

the promised gold & silver sale is here

if you didn't set your limit buy orders for silver, gold & miners - it's not too late yet

currently in late-September price ranges for many. it's also a good idea to position some buy targets below the current price levels

keep watching the gold price - it's the main driver for all

FOMC meeting is next week

📖 Quoted from 2025-10-20 01:44
https://illya.sh/thoughts/dont-forget-to-setup-your-buy-limit-orders-for-gold-silver
⏰ don't forget to setup your buy limit orders for gold, silver and their miners

gold has formed a double top on the 4H chart 📈

hello@illya.sh (Illya Gerasymchuk) — Tue, 21 Oct 2025 13:31:30 +0000

gold has formed a double top on the 4H chart 📈

that's why I wrote that buy orders below the current prices are a good idea

i'd prioritize buying opportunities in silver + gold & silver miners on this pullback

gold is also a great idea, but you'll get more volatility/relative upside in others

📖 Quoted from 2025-10-21 12:20
https://illya.sh/thoughts/the-promised-gold-silver-sale-is-here
the promised gold & silver sale is here

if you didn't set your limit buy orders for silver, gold & miners - it's not too late yet

currently in late-September price ranges for many. it's also a good idea to position some buy targets below the current price levels

keep watching the gold price - it's the main driver for all

FOMC meeting is next week

1 month ago I wrote that silver could extend its current move to ≈60% from the ≈$34.5 price level

hello@illya.sh (Illya Gerasymchuk) — Tue, 21 Oct 2025 19:34:10 +0000

1 month ago I wrote that silver could extend its current move to ≈60% from the ≈$34.5 price level

silver topped exactly there at ≈$54.5

now my next notes:

treat the pullback and any price consolidation action as a buying opportunity

during the next 6 months long positions entered in this area will be in profit. likely sooner, but 180 days provides a higher confidence timeline

📖 Quoted from 2025-09-22 20:01
https://illya.sh/thoughts/silvers-current-move-is-already-up-25-its-better-to-have-a
silver's current move is already up >25%. it's better to have a pullback somewhere around the current level

it can move up even further, extending the total move to ≈60%, but then you’ll get a larger and longer lasting pull back

when silver moves in smaller increments, it has shorter-lasting consolidations/pullbacks. so this is what i mean by "better"

silver could pullback to ≈$40 before continuing its uptrend

hello@illya.sh (Illya Gerasymchuk) — Tue, 21 Oct 2025 20:20:20 +0000

silver could pullback to ≈$40 before continuing its uptrend

this represents a ≈27% correction from the top

this is the lowest possible bottom for this move - it probably won't go this low. if it does, the move will happen fast, so have your buy limit orders ready. next week is FOMC interest rate decision. the Fed will cut the rates by another 25bps, and other things equal - it's positive price pressure for silver

if the price breaks below $47, it will likely fall closer to $45. expect a stronger support in the $43-45 area

overall, any prices in the vicinity of September 15th 2025 prices is a GREAT buying opportunity

* keep in mind the total 75 bps interest rate cut by the Fed this year is already in progress of being priced in - the market doesn't wait for the official announcement. this is one of the reasons why you had so much upside price volatility in the last month

📖 Quoted from 2025-10-21 20:34
https://illya.sh/thoughts/1-month-ago-i-wrote-that-silver-could-extend-its-current
1 month ago I wrote that silver could extend its current move to ≈60% from the ≈$34.5 price level

silver topped exactly there at ≈$54.5

now my next notes:

treat the pullback and any price consolidation action as a buying opportunity

during the next 6 months long positions entered in this area will be in profit. likely sooner, but 180 days provides a higher confidence timeline

Bitcoin needs gold. Gold doesn't need Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Wed, 22 Oct 2025 08:41:30 +0000

Bitcoin needs gold. Gold doesn't need Bitcoin

TL;DR: Bitcoin is a protocol that runs on computers. Computers rely heavily on electronics. Gold is widely used in electronics. Bitcoin depends on gold.

Bitcoin quite literally runs on gold. ≈99% of physical machines hosting Bitcoin nodes contain at least trace amounts of gold. The same is true for the overall electric grid infrastructure that delivers electricity to Bitcoin nodes.

While gold isn't strictly required for electronics, it's widely used to due to organic demand. Gold's ROI in signal connectors is very strong, because you need little gold to mitigate a large amount of failure risk. All of this is due to the unique chemical nature of gold, which alongside its scarcity is at the base of gold's intrinsic value.

Gold is a chemical element in the periodic table - its atomic symbol is Au. Physical gold is essentially Au atoms connected to other Au atoms in a cubic pattern. This structure is very stable, and at the same time soft/malleable. Gold is used in electronics because it provides stable, low and predictable contact resistance and corrosion immunity at low currents/voltages, including under vibration.

Electronics is of course just one of the use-cases of gold. Among others, it has been used as money for more than 5000 years. Even if Bitcoin does become money in the future, it won't be the only form of money (plus, you can always tokenize gold!). And especially not for the near long-term future.

Digital currencies are at their infancy, and they almost always depend on stable electrical grid and network connection to function properly. This includes Bitcoin. Gold doesn't have this risk. It was used as money before electricity and networks existed, and it can continue to be used alongside them

This is not to say that Bitcoin is a bad idea, but gold has a higher intrinsic value by definition

gold and silver miners

hello@illya.sh (Illya Gerasymchuk) — Wed, 22 Oct 2025 10:00:35 +0000

gold and silver miners
gold and silver miners
gold and silver miners
gold and silver miners
gold and silver miners
gold and silver miners
gold and silver miners

don't forget to set your limit buy orders

maximum bottom is around early September 2025 prices

it's getting closer

it's over for gold

hello@illya.sh (Illya Gerasymchuk) — Wed, 22 Oct 2025 10:24:34 +0000

it's over for gold

i've already contacted central banks to dump it too

it's not a store of value or safe haven anymore

gold is only up 12% in the last month...

clear bear market.................

😄

no, the U.S. will not pay off its debt with tariffs

hello@illya.sh (Illya Gerasymchuk) — Wed, 22 Oct 2025 10:29:33 +0000

no, the U.S. will not pay off its debt with tariffs

i think this is obvious for everyone now. if not - go read my past posts

if AI will want something it would be gold, not Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Wed, 22 Oct 2025 13:24:50 +0000

if AI will want something it would be gold, not Bitcoin

AI can create another Bitcoin protocol and program the node logic, but AI won't be able to create gold

AI will also need to gold for the signal connectors in the electronics that the AI runs on

It's chemistry/physics vs computer code. You can write new code, but you can't create new Au (without it being very, very expensive)

but Bitcoin is also taxed and surveilled - the ledger is public and attributable 😄

hello@illya.sh (Illya Gerasymchuk) — Wed, 22 Oct 2025 19:59:09 +0000

but Bitcoin is also taxed and surveilled - the ledger is public and attributable 😄

most of Bitcoin's trading volume is in central-bank issued currencies. actually, it's mostly the USD - so Bitcoin is highly susceptible to U.S. currency risk

so yes, bitcoin is risky. that's the premise of no free lunch in financial markets 😄

if you think they crypto will replace banks, you don't understand what banks are and how they work

hello@illya.sh (Illya Gerasymchuk) — Thu, 23 Oct 2025 09:14:56 +0000

if you think they crypto will replace banks, you don't understand what banks are and how they work

banks are credit institutions. it doesn't matter if they process transactions in COBOL, Bitcoin or Solidity

DLTs can and will save on costs, but that will also open opportunities for banks to expand further

it's not about the underlying technology - the credit can be issued on-chain via tokens, but there will still be heavy regulations and authorization requirements

DLTs/blockchains won't magically replace banks

and gold is up over 50% since January 20th 😄

hello@illya.sh (Illya Gerasymchuk) — Thu, 23 Oct 2025 09:59:49 +0000

and gold is up over 50% since January 20th 😄

silver is up over 60%

2025 is a fun year!

You can email JPEG

hello@illya.sh (Illya Gerasymchuk) — Thu, 23 Oct 2025 12:05:52 +0000

You can email JPEG

You can teleport JPEG

You can divide JPEG into a billion pieces and send them across the world at 2:22 AM

JPEG invented civilization 2.0

gold is up 20,000% since 1832

hello@illya.sh (Illya Gerasymchuk) — Thu, 23 Oct 2025 12:14:54 +0000

gold is up 20,000% since 1832

and for most of its history its price has been fixed by the government

gold's lowest possible bottom for current correction is ≈$3900 (area)

hello@illya.sh (Illya Gerasymchuk) — Fri, 24 Oct 2025 07:04:26 +0000

gold's lowest possible bottom for current correction is ≈$3900 (area)

the uptrend will resume soon. given the FOMC meeting next week - if that bottom arrives it should be very soon - within the next week

* this is trend analysis done in 5 mins, but likely a correct one 😄

GOLD: look for rejection at ≈$4155

hello@illya.sh (Illya Gerasymchuk) — Fri, 24 Oct 2025 14:14:28 +0000

GOLD: look for rejection at ≈$4155

if gold's price get rejected at that price level again - you'll likely see the fall to ≈$3900 target I described in my previous post

it's a good idea to have the limit buy orders ready 😄

📖 Quoted from 2025-10-24 08:04
https://illya.sh/thoughts/golds-lowest-possible-bottom-for-current-correction-is-3900
gold's lowest possible bottom for current correction is ≈$3900 (area)

the uptrend will resume soon. given the FOMC meeting next week - if that bottom arrives it should be very soon - within the next week

* this is trend analysis done in 5 mins, but likely a correct one 😄

a kind reminder that higher oil prices benefit Russia and Ruble

hello@illya.sh (Illya Gerasymchuk) — Fri, 24 Oct 2025 21:47:07 +0000

a kind reminder that higher oil prices benefit Russia and Ruble

U.S. puts sanctions on Russia --> Oil price increases --> Ruble price increases

This is driven by how Russia's National Wealth Fund (NWF) operates, plus the fact that both NWF and Russia's Central Bank have almost no exposure to USD

📖 Quoted from 2025-07-29 21:34
https://illya.sh/thoughts/oil-up-is-good-news-for-russia-ruble
🇷🇺 oil up is GOOD news for Russia & Ruble

every surplus above $60/barrel of Urals oil increases FX reserves in NWF (Yuan or gold) - an interplay between MoF and CBR

exporters pay taxes in Ruble - so higher buying pressure

mark my words:
👉 you'll see USD/RUB exchange rate fall

All reserve currencies achieved reserve status under gold or silver standards

hello@illya.sh (Illya Gerasymchuk) — Sat, 25 Oct 2025 06:54:38 +0000

All reserve currencies achieved reserve status under gold or silver standards

And some still think that Bitcoin will be the next reserve currency. Judging by the actions of the sovereigns positioning their local monetary units for reserve currency position that is highly unlikely 😁

More specifically, China & BRICS are heavily buying gold, and they have openly discussed partly gold-backed currencies several times. In the EU, the ECB is very clear on their stance against adding Bitcoin to their reserves.

Bitcoin doesn't exhibit the characteristics necessary for a reserve currency. If you believe that it does, then you need to start by explaining how it would integrate into the current financial system. Do not forget to consider Central Banks, wholesale debt markets and refinancing cycles. A potential role that Bitcoin may take is as collateral, for example in money markets. The problem is, that you will be inadvertently running into very large haircuts and low LTVs. So unless Bitcoin concisely keeps yielding higher highs, you'd be better off by using higher-quality collateral, such as government bonds or even equities.

Another point comes down to risk. The more Bitcoin is used the more risky it becomes. Sure, you can say that the network also growth with usage, but in case Central Banks start holding Bitcoin - it becomes a geopolitical liability. It will become a matter of time before disruptive attack and compromise of private keys. Also, >90% of the buy volume of Bitcoin is in USD or its derivatives, such as USD-pegged stablecoins. So it's USD that's mostly invested there, not euros, renminbi or others. This makes Bitcoin extremely exposed to USD currency risk.

Gold and silver have a much more modest exposure to the risks above. You don’t have to believe me - just look at the history. Since 500 BCE it's mostly been gold and/or silver - and Bitcoin doesn't change that.

Accounts on X that relentlessly promote the idea of Bitcoin being money, and better money than gold fail to address these points.

IMPORTANT message from finance cat:

hello@illya.sh (Illya Gerasymchuk) — Sun, 26 Oct 2025 11:34:06 +0000

IMPORTANT message from finance cat:

"I hope you bought gold, silver and their miners. - October 2025"

How exactly does Bitcoin break U.S. dollar control, when >90% of Bitcoin's buying volume is…

hello@illya.sh (Illya Gerasymchuk) — Wed, 29 Oct 2025 17:53:26 +0000

How exactly does Bitcoin break U.S. dollar control, when >90% of Bitcoin's buying volume is USD-derived (including stablecoins)?

So the Fed will fully resume Treasury purchasing, as a part of their balance sheet expansion…

hello@illya.sh (Illya Gerasymchuk) — Wed, 29 Oct 2025 19:21:58 +0000

So the Fed will fully resume Treasury purchasing, as a part of their balance sheet expansion starting December 1st 2025

Not only all maturing Treasuries will be rolled over at auctions, but also all Mortgage Backed Securities (MBS) principal will be reinvested into Treasury bills (<1 year duration)

This will lower the duration of the assets on the Fed's balance sheet and contribute to debt monetization

But that's not a surprise. 3 months ago I explained why interest rate cuts and the end of QT/start of QE is imminent

Tokenizing European Long-Term Investment Funds (ELTIF 2.0) on a Public Blockchain

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 Oct 2025 11:30:14 +0000

Tokenizing European Long-Term Investment Funds (ELTIF 2.0) on a Public Blockchain

Currently I'm working on a practical framework for tokenizing European Long Term Investment Fund (ELTIF) instruments on a smart contract-enabled public blockchain like Ethereum. While there have been some ELTIF tokenization initiatives by some funds in the EU - they all used non-public (e.g. in-house) distributed ledger technology (DLT) solutions, with scarce public information on the implementation details.

The idea of fully on-chain ELTIF is attractive for several reasons:

➖ It taps into trillions of USD of readily available on-chain liquidity
➖ It reduces processing, compliance, distribution and infrastructure costs
➖It's fully compliant with the existing EU legislation

In terms of DeFi, bridging the real world financial system on-chain enables investment vehicles, which are fully compliant with the legal systems in the EU, and by extension most jurisdictions. This increases the value of the whole DeFi ecosystem, by making it more attractive for institutional and retail investment.

To date, there isn't a clear and practical framework for operating an ELTIF fund on a public, permissionless DLT. Such a framework must encapsulate not only the legal aspects (those already exist - the relevant regulations themselves!), but also the technical details of operating the ELTIF fund via smart contracts, while remaining fully compliant with the EU legislation. This is the gap that I’m aiming to address.

I’ll be focusing on real-estate based ELTIFs - where the fund pools money from investors, invests it into real estate and collects yield from rents and appreciation, as it goes inline with my current area of work.

Is the rotation from Gold to Bitcoin in the room with us? 😉

hello@illya.sh (Illya Gerasymchuk) — Thu, 30 Oct 2025 21:42:20 +0000

Is the rotation from Gold to Bitcoin in the room with us? 😉

Over the past 2 weeks hundreds of X accounts with large following have been posting about an imminent rotation from gold to Bitcoin, once gold reaches a correction level.

Their main argument seemed to be based on Bitcoin's historic price correlation - essentially "here are some select occurrences from the past where this happened, so it will happen now". Many of them went as far as claiming that gold has topped in this cycle (it hasn't).

Local top for gold was reached, but rotation didn't happen. As I've been alluding to over this same timeframe - the reality in financial market is seldom this simplistic.

In general, you should be very wary of market thesis that are too abstract, or fail to consider the macro picture.

Why would a Central Bank hold Bitcoin in reserves?

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Nov 2025 12:13:02 +0000

Why would a Central Bank hold Bitcoin in reserves?

1. Even assuming that Bitcoin is an inflation hedge - it still doesn't mean that Central Banks should hold it. What would be the purpose of that? Central Banks are not commercial institutions - they hold assets for very specific reasons (e.g. FX rate stabilization).

2. You may have misunderstood me. I said that Bitcoin isn't money - but that by itself doesn't mean that Central Banks shouldn't hold it. FIAT currencies aren't money either. Neither are government bonds. BUT - those bonds or currencies generally don't crash >50% on cycle tops. So it's the fact that it's not money, combined with the other points I mentioned here and in the article that i linked

3. Kaspa isn't money. It certainly hasn't been long enough to be classified as money, nor it has enough intrinsic value. It carries the same set of technology risks as other cryptocurrencies- and even without looking at the chart - I can tell you that it's correlated to the rest of the crypto market.

I am a big fan of crypto, but we need to keep it real 😄

Thousands of accounts on X with large following shill Bitcoin/Crypto non-stop, with little reasoning behind it. They either do it for pay, engagement or a mix of both.

You don't have to look far - usually just search for "gold" on their profile and you'll find something like this (see screenshot).

If you want to understand how Bitcoin is not gold, it will never be gold, and it will never replace gold - read this article: https://illya.sh/threads/bitcoin-needs-gold-gold-doesnt-need-bitcoin.html

Multiple governments have seized Bitcoin

hello@illya.sh (Illya Gerasymchuk) — Sat, 01 Nov 2025 15:24:21 +0000

Multiple governments have seized Bitcoin

In fact, more Bitcoin has been seized than gold in the U.S. It's really not hard to google this, but here are some examples:

- Silk Road takedown (2013–2015) - ≈175K BTC
- "Individual X" Silk Road stash (2020) - ≈75K BTC
- Bitfinex-hack recovery (2022) - >94K BTC
- Movie2K piracy case - ≈50K BTC
- Finland Customs seizures - ≈2K BTC
- Netherlands money-laundering case - ≈2.5K BTC
- China PlusToken crackdown ≈200K BTC

Regarding gold - yes, it was seized in the past in the US, but it was at a much smaller scale than you imagine.

The publicly documented, conservative floor for government-seized BTC is ≈700K BTC (≈$77B today), which is already above the $58–110B value range for U.S. public gold coin surrendered in 1933–34.

If your argument is that Bitcoin is better than gold, because it's more private/seizure resistant - you are wrong.

If you think that by holding Bitcoin you're immune to U.S. government policies you're also wrong, as more than 90% of all Bitcoin buying volume comes from USD or USD derivatives (including stablecoins).

Gold is within the fabric of money, not just Central Banks

hello@illya.sh (Illya Gerasymchuk) — Sun, 02 Nov 2025 14:59:51 +0000

Gold is within the fabric of money, not just Central Banks

A lot of posts on X frame Central Banks as malevolent institutions, and by some form of conspiracy they hold gold in their reserve accounts. And apparently not holding gold is a step towards monetary freedom - even more if you forego an atomic element (Au) for a cryptographic computer algorithm (Bitcoin).

A more productive approach is asking why do Central Banks chose gold over all other commodities and assets. Every single world reserve currency, without exception, started on a gold and/or silver standard. Gold has been used as money for over 5000 years.

I've written several articles on what makes gold so special and how Bitcoin is not a replacement for gold. I'll leave them linked below

More Bitcoin has been seized than Gold

hello@illya.sh (Illya Gerasymchuk) — Sun, 02 Nov 2025 19:07:56 +0000

More Bitcoin has been seized than Gold

If you think that Bitcoin is harder to seize than gold, you are probably wrong. At least according to the data.

In the history of Bitcoin's existence, much much more Bitcoin has been seized than Gold. You don't need to compromise cryptographic primitives to seize Bitcoin.

Apparently this isn't a very well known fact in the Bitcoin Maxi world 😄

A U.S. dollar note doesn't care who you are or where you're from - the laws of physics are fair…

hello@illya.sh (Illya Gerasymchuk) — Sun, 02 Nov 2025 19:31:29 +0000

A U.S. dollar note doesn't care who you are or where you're from - the laws of physics are fair for everyone

Neither does gold, nor a coffee bean or a rock. In fact, this is true for most inanimate objects.

There is nothing special about that property.

Anyone can buy 1 JPEG, but not everyone

hello@illya.sh (Illya Gerasymchuk) — Sun, 02 Nov 2025 21:03:29 +0000

Anyone can buy 1 JPEG, but not everyone

2 JPEGs for 8 billion people (there are 2 fungible copies)

Everyone on earth is in this race to accumulate JPEGs, but 99% haven't realized it yet

Coffee outperformed Gold in the last 5 years

hello@illya.sh (Illya Gerasymchuk) — Mon, 03 Nov 2025 20:30:57 +0000

Coffee outperformed Gold in the last 5 years

Would it be sound to conclude that coffee beans are better money and investment than gold, and that Central Banks should hold coffee & its derivatives in reserve assets?

Bitcoin has less than 20 years of price action, and it started trading at a negligent price. Gold has been money for over 5000 years and its earliest recorded price per ounce is of ≈100 days of labor

A better question is whether Bitcoin will continue to consistently outperform gold over the next 20 years. *Consistency* is key - it must be at least a store of value, including shorter-term. If you get caught in the typical >50% price drops - you may pay a high opportunity cost.

It's not just whether Bitcoin will increase more in price than gold in the next 20 years, but also how severe and long-lasting Bitcoin's corrections are.

Imagine you buy Bitcoin today and it goes into a bear market with a significant value loss in the next 4 years. In those 4 years - many investment opportunities may arise, such as in real estate, equities, commodities or bonds. If your capital is locked in Bitcoin throughout that period - that's an opportunity cost.

Gold doesn't come with those shortcomings. There is a reason why all world reserve currencies started on a gold and/or silver standards.

There is no free lunch in the markets. Higher return is almost unanimously correlated with higher risk. Quantitatively Bitcoin is high risk- it's not a matter of opinion.

This doesn't mean that Bitcoin is a bad idea, but it also doesn't mean that Bitcoin is a better idea than gold. It does, however mean, that Bitcoin isn't a replacement for gold.

And now you understand what makes gold so special. You don't have to believe me - believe centuries of price action and human history.

Illya's Threads and Thoughts Now Uses Slugs In URLs

hello@illya.sh (Illya Gerasymchuk) — Tue, 04 Nov 2025 20:07:44 +0000

Illya's Threads and Thoughts Now Uses Slugs In URLs

I've extended my static site with short (thoughts) and longer-form (threads) posts to have their URLs structured in the form of a slug.

Before, each individual thought’s and thread's HTML page name (and by extension, its URL) was based on the timestamp of the post. Now, it’s based on the first line of the post.

So now the URLs are nicer looking, more human readable, and much more SEO and LLM friendly.

For example https://illya.sh/threads/@1761122490-0 becomes https://illya.sh/threads/bitcoin-needs-gold-gold-doesnt-need-bitcoin

You will notice that the former URL still functions via a redirect to the new slug-based URL. This is because there were already thousands of pages indexed in search engines, and a smaller amount of third-party links (mostly other platforms, comments, direct shares and intra-links).

This was on the future TODO list since pretty much the start of the project, but it was purposefully delayed until the amount of content justified it. Also ChatGPT kept bugging me to update to slugs for a better SEO

From an architectural perspective everything is still fully static, automated and straightforward:

➖ The slug is constructed by getting the first line of the post, sanitizing it and adding dashes. It can have up to 60 characters in length

➖ The redirects are static. There is a Python list with hardcoded IDs for all previously generated threads and thoughts

more mobile phones can also be produced - that doesn't mean that price of existing phones will go…

hello@illya.sh (Illya Gerasymchuk) — Tue, 04 Nov 2025 21:35:05 +0000

more mobile phones can also be produced - that doesn't mean that price of existing phones will go down

building new houses does not reduce the demand for highly desired areas - physical space is limited

moreover, those new houses will be built with the same credit/funding that will further drive real estate prices up. there is a reason banks eagerly finance at least 75% of the property value

European Investment Funds Explained: UCITS, AIFs, AIFMD and the ELTIF Regime

hello@illya.sh (Illya Gerasymchuk) — Wed, 05 Nov 2025 20:10:41 +0000

European Investment Funds Explained: UCITS, AIFs, AIFMD and the ELTIF Regime

As I’ve previously written, I am working on a framework for tokenizing European Long Term Investment Fund operation (ELTIF 2.0) on a public, smart-contract enabled blockchain like Ethereum. You can read more about it here: https://illya.sh/threads/tokenizing-european-long-term-investment-funds-eltif-2-0-on

This is financial markets legislation heavy topic, and it involves several regulations and directives, each one meticulously outlining rules and exceptions which together form a framework for operating various investment funds in the European Union.

I come across many negative commentaries regarding EU regulations in general, but not so many explaining those regulations. In general, there is not much information covering this topic on the internet, and if you ask ChatGPT to explain it - it will likely take you several iterations and back-and-forth to understand it.

Since this falls under my current area of work - I thought that it would be useful to share the knowledge, and provide a clear and concise starting point for anyone looking into investment funds legislation and practical application in the European Union.

So first of all let’s start with the definition of a “fund”. EU law doesn’t have a unanimous definition for what constitutes a fund. Instead, it defines rules for two collective investment schemes:

1️⃣ Undertakings for Collective Investment In Transferable Securities (UCITS) defined in Directive 2009/65/EC
2️⃣ Alternative Investment Funds (AIFs) defined in AIFMD Directive 2011/61/EU

UCITS is defined as an undertaking whose sole purpose is collective investment in transferable securities and other liquid financial assets, with the holders of UCITS units/shares being able to redeem/repurchase them on demand out of UCITS’s assets/holdings. The strict list of eligible assets is defined in Article 50 of Directive 2009/65/EC and it includes:

1️⃣ Transferable securities, which are securities that are negotiable/tradable on capital markets, such as shares/equities and bonds.
2️⃣ Money market instruments
3️⃣ Deposits with credit institutions
4️⃣ Certain financial derivatives

As per Article 5, a UCITS must be managed by “management company”, which is defined as a company whose regular business is to manage UCITS (Article 2(1)(b)), or set up as a self-managed investment company under Articles 29-31. As per Article 6(1) this management company must be authorized. Before a UCITS is authorized its’s management company must be authorized.

Alternative Investment Fund (AIF) is defined in Directive on Alternative Investment Fund Managers (AIFMD) to encompass all undertakings that raise capital from investors, invest according to a clearly defined investment policy for the benefit of the investors, and do not require UCITS authorization. In this sense, AIF is a functional classification, and it explicitly captures other collective investments that do not fall under the UCITS definition, as per Directive 2009/65/EC.

As a general rule, anything that’s a collective investment undertaking, but not a UCITS is an AIF. That definition comes directly from AIFMD Article 4.

An AIF must always be managed by an Alternative Investment Fund Manager (AIFM). Under Article 4(1)(b) of AIFMD, an AIFM is defined as “legal persons whose regular business is managing one or more AIFs”. Article 5 from AIFMD further reinforces this idea by requiring every AIF to have a single AIFM legally responsible for its compliance. This management entity can either be external (external AIFM) or the AIF may be managed internally with the AIF itself obtaining AIFM authorization. Article 6(1) mandates that no entity may manage an AIF, unless they are authorized as an AIFM (i.e. the managing entity must be authorized). The AIFM in an AIF is equivalent to the “management company” in UCITS.

European Long Term Investment Fund (ELTIF), defined in Regulation (EU) 2015/760, and later amended by Regulation (EU) 2023/606 , is a type of Alternative Investment Fund (AIF). All ELTIF are AIF, but in order for an AIF to be ELTIF, it must meet the requirements outlined in the regulation and is subject for authorization.

As such, under the EU law, ELTIF is not a distinct class of funds/collective investment schemes, but rather a legal label that an AIF can apply for. Since an ELTIF is an AIF, it is also managed by an AIFM.

So what distinguishes an ELTIF from a “regular” AIF? In short, it’s the type of assets that the collective investment undertaking holds. Among others, an ELTIF must invest ≥55% of its capital into eligible assets, which include real assets (e.g. real estate) and STS securitizations. Moreover, an ELTIF cannot invest into commodities, the use of financial derivatives is only allowed for hedging and there are limits on borrowing/leverage.

So why would one bother with the ELTIF label? Well, having the ELTIF label means your collective investment undertaking product is available to retail (i.e. to non-professional investors) EU-wide. An ELTIF allows you to offer illiquid investments to retail in the whole European Union

In conclusion - EU law defines a fund as a collective investment undertaking, and it can be of two types: UCITS or AIF. An ELTIF is a type of AIF, which comes with retail EU passport benefits.

This article doesn’t aim to be exhaustive, but rather to be used as the basis for forming a mental model on the legal structure of funds in the European Union, and how the ELTIF fits into the framework.

My article on Gold vs Bitcoin, and how Bitcoin needs Gold, but Gold doesn't need Bitcoin:…

hello@illya.sh (Illya Gerasymchuk) — Wed, 05 Nov 2025 21:14:51 +0000

My article on Gold vs Bitcoin, and how Bitcoin needs Gold, but Gold doesn't need Bitcoin: https://illya.sh/threads/bitcoin-needs-gold-gold-doesnt-need-bitcoin.html

📖 Quoted from 2025-11-02 14:59
https://illya.sh/thoughts/gold-is-within-the-fabric-of-money-not-just-central-banks
Gold is within the fabric of money, not just Central Banks

A lot of posts on X frame Central Banks as malevolent institutions, and by some form of conspiracy they hold gold in their reserve accounts. And apparently not holding gold is a step towards monetary freedom - even more if you forego an atomic element (Au) for a cryptographic computer algorithm (Bitcoin).

A more productive approach is asking why do Central Banks chose gold over all other commodities and assets. Every single world reserve currency, without exception, started on a gold and/or silver standard. Gold has been used as money for over 5000 years.

I've written several articles on what makes gold so special and how Bitcoin is not a replacement for gold. I'll leave them linked below

My article on how all reserve currencies started on a gold and/or silver standard:…

hello@illya.sh (Illya Gerasymchuk) — Wed, 05 Nov 2025 21:25:05 +0000

My article on how all reserve currencies started on a gold and/or silver standard: https://illya.sh/threads/all-reserve-currencies-achieved-reserve-status-under-gold-or

📖 Quoted from 2025-11-05 21:14
https://illya.sh/thoughts/my-article-on-gold-vs-bitcoin-and-how-bitcoin-needs-gold-but
My article on Gold vs Bitcoin, and how Bitcoin needs Gold, but Gold doesn't need Bitcoin: https://illya.sh/threads/bitcoin-needs-gold-gold-doesnt-need-bitcoin.html

Bitcoin is not just for speculative gambling

hello@illya.sh (Illya Gerasymchuk) — Thu, 06 Nov 2025 15:07:45 +0000

Bitcoin is not just for speculative gambling

Nation state-linked companies are already settling their transactions in Bitcoin. Sure, they're using Bitcoin only as an intermediary, not as the end settlement unit of account, but this takes Bitcoin's utility far beyond gambling.

Just because Bitcoin isn't replacing gold as money, doesn't mean that it's a failure. Just because Bitcoin bitcoin collapsed below 100K, doesn't mean it won't come back higher (liquidity cycles suggest it will).

Extremes are better for engagement, but reality is very inclusive.

Gold as a percentage of balance sheet size in Central Banks (ranked):

hello@illya.sh (Illya Gerasymchuk) — Mon, 10 Nov 2025 16:26:09 +0000

Gold as a percentage of balance sheet size in Central Banks (ranked):

🇯🇵 Japan (MoF + BoJ): ≈2.4%
🇨🇳 China (PBoC): ≈4.5%
🇺🇸 U.S. (Fed gold certificates): ≈15.9%
🇪🇺 European Union (ECB + Eurosystem): ≈19.4%
🇷🇺 Russia (BoR): ≈36.1%

All of the above will expand their balance sheets, but it's mostly China & Russia actively buying more gold.

Conclusions you can take from here:

➖ China's gold holdings are relatively small when compared to their Central Bank's balance sheet size, and given their efforts to promote renminbi as the invoice currency worldwide, you can expect PBoC to continue their gold purchases for the medium-long term. The gold share must at least double to come close to the current reserve currency - the U.S. dollar. All reserve currencies started on a gold and/or silver standard - and the pressure towards this direction won't be different for renminbi/yuan. When the USD became the world reserve currency with the Bretton-Woods agreement - gold certificates accounted for ≈40% of the Fed's balance sheet.

➖ Russia has built up a massive balance sheet capacity for the future. Once the international trade markets with Russia re-open, there will be a plenty of reserves to back-up a massive wave of Ruble credit. Expect Russian capital markets to rally then.

➖ European Union has a healthy relative position. Given that the Euro is currently the closest alternative to the U.S. Dollar - it's a good idea to both, expand gold reserves and promote capital markets. The latter is an explicit goal via the Capital Markets Union (CMU). Given that EU will further expand the balance sheet, it's necessary to increase the gold reserves - repricing won't be enough. Gold will make Euro more attractive, and with it the FX holdings of Euro by sovereigns.

My prediction on gold's bottom was correct: ≈$3900 ✅

hello@illya.sh (Illya Gerasymchuk) — Wed, 12 Nov 2025 16:47:29 +0000

My prediction on gold's bottom was correct: ≈$3900 ✅

You can direct anyone who is saying that gold and silver have topped to my posts.

If you think that gold and silver have topped - I'm really curious to hear your thesis. I've laid mine out extensively in prior writings.

📖 Quoted from 2025-10-24 15:14
https://illya.sh/thoughts/gold-look-for-rejection-at-4155
GOLD: look for rejection at ≈$4155

if gold's price get rejected at that price level again - you'll likely see the fall to ≈$3900 target I described in my previous post

it's a good idea to have the limit buy orders ready 😄

My prediction on Silver's bottom was correct: ≈$43-45 ✅

hello@illya.sh (Illya Gerasymchuk) — Thu, 13 Nov 2025 11:48:55 +0000

My prediction on Silver's bottom was correct: ≈$43-45 ✅

The uptrend goes on. The price will encounter more corrections along the way, but the bottoms I described previously remain valid.

Like for gold, I would re-analyze critically all sources that were claiming that the bullrun for silver is over.

📖 Quoted from 2025-10-21 21:20
https://illya.sh/thoughts/silver-could-pullback-to-40-before-continuing-its-uptrend
silver could pullback to ≈$40 before continuing its uptrend

this represents a ≈27% correction from the top

this is the lowest possible bottom for this move - it probably won't go this low. if it does, the move will happen fast, so have your buy limit orders ready. next week is FOMC interest rate decision. the Fed will cut the rates by another 25bps, and other things equal - it's positive price pressure for silver

if the price breaks below $47, it will likely fall closer to $45. expect a stronger support in the $43-45 area

overall, any prices in the vicinity of September 15th 2025 prices is a GREAT buying opportunity

* keep in mind the total 75 bps interest rate cut by the Fed this year is already in progress of being priced in - the market doesn't wait for the official announcement. this is one of the reasons why you had so much upside price volatility in the last month

In July I wrote a primer on the mechanics by which the Fed steers the prevailing interest rates in…

hello@illya.sh (Illya Gerasymchuk) — Thu, 13 Nov 2025 22:12:50 +0000

In July I wrote a primer on the mechanics by which the Fed steers the prevailing interest rates in the economy.

It covers the ON RRP, IORB, Discount Rate and SRF channels, explaining how together they set a corridor with upper and lower limits for the effective rate.

Prior to today the article reading experience was subpar, due to the amount of supporting images - the thread is composed of several shorter posts, and each one came with an image.

I've made it a lot more readable by removing most of the images

As I've written earlier today, Silver will encounter corrections

hello@illya.sh (Illya Gerasymchuk) — Thu, 13 Nov 2025 23:09:04 +0000

As I've written earlier today, Silver will encounter corrections

These are all buying opportunities - as is the whole price range within current larger pullback. The price bottoms I written about remain unchanged. The uptrend will resume

The same is true for gold

📖 Quoted from 2025-11-13 11:48
https://illya.sh/thoughts/my-prediction-on-silvers-bottom-was-correct-43-45
My prediction on Silver's bottom was correct: ≈$43-45 ✅

The uptrend goes on. The price will encounter more corrections along the way, but the bottoms I described previously remain valid.

Like for gold, I would re-analyze critically all sources that were claiming that the bullrun for silver is over.

This is how The Soviet Union kickstarted Eurodollar markets in the 1950's

hello@illya.sh (Illya Gerasymchuk) — Fri, 14 Nov 2025 14:03:01 +0000

This is how The Soviet Union kickstarted Eurodollar markets in the 1950's

Eurodollars are USD deposits held at banks outside the U.S. Originally, they were held mostly in European jurisdictions, thus the "Euro" in the name.

URSS needed U.S. dollars for international trade, but they didn't trust keeping balances directly in New York, as they feared that U.S. would freeze or seize those deposits.

So URSS placed their USD deposits in European banks, often via Soviet-linked banks. Those European banks then re-deposited or lent out those dollars to other banks and institutions.

I've written extensively how the policies of the current U.S. administration are a negative for the USD. Asian countries have been progressively moving away from USD, and this is a sign from Europe in that direction (but don't expect heavy de-dollarization in the near future).

Overall, I view this as a net positive for the sovereignty of EU/Europe as a whole. A more developed financial system infrastructure is crucial for attracting the use of Euro, which is already the 2nd most used currency in the world.

You can read the article here:…

hello@illya.sh (Illya Gerasymchuk) — Fri, 14 Nov 2025 16:00:45 +0000

You can read the article here: https://illya.sh/threads/how-does-the-federal-reserve-set-interest-rates

📖 Quoted from 2025-11-13 22:12
https://illya.sh/thoughts/in-july-i-wrote-a-primer-on-the-mechanics-by-which-the-fed
In July I wrote a primer on the mechanics by which the Fed steers the prevailing interest rates in the economy.

It covers the ON RRP, IORB, Discount Rate and SRF channels, explaining how together they set a corridor with upper and lower limits for the effective rate.

Prior to today the article reading experience was subpar, due to the amount of supporting images - the thread is composed of several shorter posts, and each one came with an image.

I've made it a lot more readable by removing most of the images

Russia will buy Silver as a strategic reserve until 2027

hello@illya.sh (Illya Gerasymchuk) — Fri, 14 Nov 2025 19:14:59 +0000

Russia will buy Silver as a strategic reserve until 2027

I'm not speculating on anything, this comes directly from the Russian legislation, namely the Federal Law № 419-ФЗ (in Russian/cyrilic: Федеральный закон от 30 ноября 2024 г. № 419-ФЗ) whose budget tables for 2025–2027 allocate ≈51.5 billion rubles (≈$640M) per year as budget for the "acquisition of state reserves of precious metals and precious stones".

Silver falls explicitly under the definition of "precious metals". More specifically, under Russian framework law № 41-ФЗ the term "precious metals" ("драгоценные металлы") is explicitly defined as gold, silver, platinum and the metals of the platinum group.

In addition to the above, in the official explanatory note (пояснительная записка) to the draft of Federal Law № 419-ФЗ the Russian Ministry of Finance explicitly states that the plan is to acquire refined gold, refined silver, refined platinum and refined palladium for strategic goals. More specifically, the aim is to increase the share of "highly liquid valuables" in the State Fund of Precious Metals and Precious Stones of the Russian Federation (Госфонд России).

In my post ranking gold as a percentage of central bank balance sheet size I wrote renminbi/yen,…

hello@illya.sh (Illya Gerasymchuk) — Fri, 14 Nov 2025 23:08:25 +0000

In my post ranking gold as a percentage of central bank balance sheet size I wrote renminbi/yen, when I meant renminbi/yuan

Yen is, of course, the Japanese, not PRC's local currency. I will correct this under threads & thoughts on my website, but it will remain with this typo on X (you can't update the post after 1 hour)

Just wait until Bitcoin hype accounts find out that Czechia has not adapted the Euro, so it's not…

hello@illya.sh (Illya Gerasymchuk) — Sat, 15 Nov 2025 17:12:36 +0000

Just wait until Bitcoin hype accounts find out that Czechia has not adapted the Euro, so it's not a part of the Eurozone.

Thus, the Czech National Bank (CNB) is a part of European System of Central Banks (ESCB), but not a full Eurosystem central bank, so it's not represented in and not bound by the ECB Governing Council's monetary policy decisions.

No Eurozone National Central Bank (NCB) is holding Bitcoin in their reserves, and ECB's current policy rejects the idea of BTC as a reserve asset.

Watch what they do, not what Bitcoin hype media says.

MicroStrategy Is Dependent On Refinancing Capacity, Not Bitcoin Price

hello@illya.sh (Illya Gerasymchuk) — Sun, 16 Nov 2025 16:41:58 +0000

MicroStrategy Is Dependent On Refinancing Capacity, Not Bitcoin Price

MSTR won't have to sell Bitcoin if BTC price goes down, they'll have to sell Bitcoin if they're unable to acquire funding along the maturity of their debt wall.

MicroStrategy is essentially a leveraged trade on Bitcoin, based on the following cycle:

1️⃣ Acquire funding via debt or equity
2️⃣ Buy Bitcoin
3️⃣ Repeat

This cycle works for as long as MSTR is able to obtain funding. Once funding becomes unavailable (i.e. market isn't willing to lend at favorable interest rates), funding must come from asset liquidation (i.e. the sale of Bitcoin).

The availability of funding is mostly dependent on Bitcoin's price. As long as Bitcoin price and trend is favorable around the dates when the debt wall matures - MSTR should be able to continue their leveraged trade. MSTR share price vs Bitcoin NAV is also important. If MSTR trades a premium over Bitcoin's NAV it allows Microstrategy to short their own equity and long Bitcoin.

However, an unfavorable Bitcoin price action environment (e.g. during a bear market) that coincides with debt repayment obligations may trigger the unwinding of this leveraged position, forcing MSTR to sell Bitcoin, thus putting further downwards price pressure on Bitcoin, which lowers Microstrategy's equity even more, which makes lender even less likely to lend. The end result is an even more degraded funding capacity, which at the limit leads to bankruptcy.

Debt starts maturing from 2028 (≈$1B), but the most significant portion of ≈70%/$5.8B matures in 2029-2030. This is where the price of Bitcoin is of great importance for Microstrategy's solvency.

So don't expect Microstrategy to have pressure to sell significant amounts of Bitcoin before at least 2027, even if the Bitcoin price stays low.

MicroStrategy Can't Repay Its Debt In Equity/Stock

hello@illya.sh (Illya Gerasymchuk) — Sun, 16 Nov 2025 23:01:12 +0000

MicroStrategy Can't Repay Its Debt In Equity/Stock

Most of MicroStrategy's debt is in the form of convertible bonds, meaning that by default the principal and the coupons get repaid the cash.

The "convertible" part means the bondholder can choose to convert the bond into shares/equity instead, and then MSTR chooses how settle the conversion of the bond's value in cash, equity or mix.

So MSTR cannot force the debt settlement/repayment in stock/equity - that's simply an option that the bondholders/investors have.

The repayment can always be in cash assuming that MSTR is solvent, as most of the debt is unsecured, meaning that there is no specific collateral pledged against that debt. In case of insolvency, unsecured debt holders are treated as general creditors of the company, and are repaid out of the remaining assets only after secured debt holders are repaid, but before equity holders.

Europe's Gold Imports and Exports Explained

hello@illya.sh (Illya Gerasymchuk) — Mon, 17 Nov 2025 12:44:45 +0000

Europe's Gold Imports and Exports Explained

Europe has gold mines in Finland, Sweden, Türkiye and Romania among others.

Together they account for <2% of world output (≈70 tones of gold/year). Europe is heavily dependent on gold imports, with >90% of the gold for its needs being imported.

Switzerland is the world's largest gold refining and transit hub, with at least ≈50% of all of the newly minted gold passing through Swiss refineries. Refining and re-exporting is by far the largest driver of European gold imports.

Europe imports ≈3900 tones of gold per year, but only keeps 10% of it.

Strategy (MSTR) pays interest on its debt via a mixture of capital markets, software business…

hello@illya.sh (Illya Gerasymchuk) — Tue, 18 Nov 2025 14:54:01 +0000

Strategy (MSTR) pays interest on its debt via a mixture of capital markets, software business cashflow, existing reserves & investments and Bitcoin sales.

MSTR's annual coupon payments are not that high - ≈$40M/year. The convertible bonds that they issue come with small coupons (e.g. 0%, 0.625%, %0.875, 2.25%)

Given MSTR's software business revenue of ≈$500M/year, but it actually operates at a ≈$60M loss after expenses are accounted for.

So effectively, strategy pays interest expenses from the same corporate funds bucket that they rase to purchase Bitcoin in capital markets.

How MicroStrategy Pays Interest On Its Debt?

hello@illya.sh (Illya Gerasymchuk) — Thu, 20 Nov 2025 08:56:39 +0000

How MicroStrategy Pays Interest On Its Debt?

The short answer is that MSTR finances its debt service via a mixture of:

➖ Software business cashflow
➖ Existing reserves & short-term investments
➖ Capital market instruments, such as issuing new equity or debt
➖ Asset liquidation (Bitcoin sales)

MSTR's annual coupon payments sum up to ≈$34.6M/year. Currently, virtually all of MSTR's financial debt is in convertible bonds/senior notes. Those bonds come with small coupons, so relatively small interest payments.

More specifically, here is how MicroStrategy's/Strategy's outstanding outstanding convertible bond maturity, principal, coupon rate and total yearly interest look like:

2028 | $1.01B @ 0.625% | $6.3M
2029 | $3.0B @ 0% | $0M
2030A | $0.8B @ 0.625% | $5M
2030B | $2.0B @ 0% | $0M
2031 | $0.604B @ 0.875% | $5.3M
2032 | $0.8B @ 2.25% | $18M

(Format: <year> | <principal> @ <coupon> | <anual interest>)

If you sum up the interest payments you’ll get ≈$34.6M/year in total.

The yearly revenue of MSTR's software services business is almost ≈$500M/year. However, their software portion of the business actually operates at ≈60M/year loss, when using U.S. Generally Accepted Accounting Principles (GAAP).

Strategy advertises their software portion of the business as being in profit, but they "manipulate" those numbers a little. This "manipulation" involves MSTR not counting stock-based compensation as expenses.

So when you hear Strategy advertising profit from their software business - they're not using a legally recognized and standardized measure of profit (in the U.S. it's GAAP). So they take the GAAP software profit and then add some things back at their discretion (i.e. they don't count some expenses), thus turning a negative profit (loss) into a positive one.

This means that while their software business revenue can help them with having liquidity for interest payments - it doesn't cover those costs (since they operate at loss, it actually increases the total cost!).

Thus, Strategy finances their interest rate payments with a mixture of:

➖ Existing reserves & short-term investments
➖ Capital market instruments, such as issuing new equity or debt (main source)
➖ Asset liquidation

The software revenue provides significant cashflow (compared to interest rate costs), so it can help with having cash readily available to make an interest payment (liquidity), but it doesn't effectively cover them, thus requiring financing from other sources.

In Net Terms, Bitcoin is a Geopolitical Liability, Not an Asset

hello@illya.sh (Illya Gerasymchuk) — Thu, 20 Nov 2025 16:41:33 +0000

In Net Terms, Bitcoin is a Geopolitical Liability, Not an Asset

This is because Bitcoin is vulnerable to attacks targeting its consensus and network availability. A sufficiently resourceful adversary can yield the Bitcoin network inoperable and/or untrustable

A nation state adversary can take the Bitcoin network down, at least a significant portion of it. And it doesn't require them having access to quantum computers or compromising the underlying cryptographic primitives in other manner.

This is why sovereign strategic Bitcoin reserves, including BTC as a Central Bank reserve asset is not a good idea, at least in the current state and design of the Bitcoin protocol.

Strategy Invents Financial Metrics And Everybody Applauds 👏

hello@illya.sh (Illya Gerasymchuk) — Fri, 21 Nov 2025 14:07:08 +0000

Strategy Invents Financial Metrics And Everybody Applauds 👏

MSTR's own website states that their reports do not reflect the financial reality:

"None of BTC Rating, BTC Credit, or BTC Risk are measures of financial results or liquidity, or key performance indicators."

Strategy's software business also operates at a ≈$60M loss, but on their website and socials they decide to ignore a part of expenses and market it as profit. So they create their own non-standard accounting and credit metrics and advertise those.

Strategy has a consistent pattern of misrepresenting their financials to look more favorable in their public marketing campaigns. A lot of it is in the form of Michael Saylor's videos, podcast appearances and posts on X. A lot seem to think that just because someone says something in a video or a social media post it must be true.

Words can be deceiving, numbers not so much.

Updated OpenGraph Images On Thoughts & Threads At My Website

hello@illya.sh (Illya Gerasymchuk) — Fri, 21 Nov 2025 20:38:18 +0000

Updated OpenGraph Images On Thoughts & Threads At My Website

Before the OG image was always a "screenshot" of the starting text. Now, if the post or article has an attached image (most of them do), it gets used instead.

Here's an example:
https://illya.sh/threads/how-microstrategy-pays-interest-on-its-debt

1 oz of Bullion Gold Costs ≈$1910 to Produce

hello@illya.sh (Illya Gerasymchuk) — Sun, 23 Nov 2025 01:34:02 +0000

1 oz of Bullion Gold Costs ≈$1910 to Produce

Gold's current spot price is ≈$4100. There's a ≈$2190 price gap between what gold costs to buy and what it costs to mine & refine.

The majority of that $2190 profit per 1 ounce of gold goes to the miners. Gold refiners earn just a few dollars per ounce in profit.

This is why mining stocks are currently such a good investment idea.

1 oz of Gold: Production Cost and Miner Profit

hello@illya.sh (Illya Gerasymchuk) — Sun, 23 Nov 2025 13:58:39 +0000

1 oz of Gold: Production Cost and Miner Profit

1 oz of gold costs ≈$1500 to mine (AISC), ≈10$ to transport and refine and another ≈$400 in various other expenses.

In total, that sums to about ≈$1910 to get 1 ounce of gold from the ground to bullion gold bar.

Currently, gold trades at ≈$4100/oz (when you're reading this it's probably much higher 😄). This means there is about $4100-$1910=$2190 of margin on each ounce of refined gold. Almost all of this margin on the sale of an ounce of gold is pocketed by gold miners.

Let's compute the profit per ounce of gold from the perspective of a miner. Gold miners generally sell gold to refineries at a fixed haircut over the spot price. This haircut is generally very small, ≈$10 which accounts mainly for refining and treatment costs. So with the numbers above (also see attached image), gold miners are making a profit of $4100-$(1500+400+10)=$2190 (the same number we computed above).

The larger the premium/gap of gold's spot price over its production costs, the larger is the profit for the miners. As the cost of labor and industrial production increases due to global monetary debasement, so will gold production costs. The same monetary debasement, combined with strong demand for gold will push its price further up.

In the next 2-3 years, I expect gold price to increase by a larger proportion than gold mining costs, as gold is under several positive price pressure points (central banks, USD alternatives, monetary debasement, etc). Thus, the margin over mining costs should remain high, leading to a sustained high profit per ounce of gold for miners.

This is why gold mining stocks are currently a great investment. The same is true for other miners, such as silver.

How the 1916 Fed Act Made Treasuries Prime Collateral

hello@illya.sh (Illya Gerasymchuk) — Sun, 23 Nov 2025 16:11:13 +0000

How the 1916 Fed Act Made Treasuries Prime Collateral

Before 1916, the Fed would only lend to banks against "eligible paper", which included self-liquidating commercial loans and agricultural loans.

The Federal Reserve Act 1916 amendment expanded the Fed's legal power to allow for lending to commercial banks against U.S. Treasuries (government bonds).

This effectively turned U.S. government debt into collateral backing Fed's liabilities. This paved the way for the U.S. Treasuries to become the most used form of collateral in short-term wholesale debt markets (e.g. repo/repurchase agreements) today.

A Primer On Strategy/MSTR Business, Financials, Liquidity and Solvency

hello@illya.sh (Illya Gerasymchuk) — Mon, 24 Nov 2025 15:34:47 +0000

A Primer On Strategy/MSTR Business, Financials, Liquidity and Solvency

There's a lot of misinformation how Strategy/MicroStrategy operates, its business model and what MSTR can and can't do.

This served as a motivation for me to write 4 short, primer-style articles on MSTR:

1️⃣ MSTR’s business model, describing how the company operates as a "Bitcoin treasury" and what does it mean for its solvency. You can read it here: https://illya.sh/threads/microstrategy-is-dependent-on-refinancing-capacity-not

2️⃣ Why MicroStrategy can’t replay its debt using equity/stock. You can read it here: https://illya.sh/threads/microstrategy-cant-repay-its-debt-in-equity-stock

3️⃣ How Strategy pays for its interest, which currently accounts to ≈$40M/year. You can read it here: https://illya.sh/threads/how-microstrategy-pays-interest-on-its-debt

4️⃣ How Strategy's marketing is misleading regarding MSTR’s risk, liquidity and solvency. You can read it here: https://illya.sh/threads/strategy-invents-financial-metrics-and-everybody-applauds

I suggest reading them in the same order as above, but they're self-isolated. It's a short read, and together they will give you a good understanding on how Strategy operates (its business model), what are its main risks, what MSTR can and cannot do regarding debt repayments, and why you probably shouldn’t trust their marketing campaigns, including the statements made by Michael Saylor on X and various podcasts/videos where he appears.

Central Banks were more influenced by farming than you probably think

hello@illya.sh (Illya Gerasymchuk) — Wed, 26 Nov 2025 15:06:25 +0000

Central Banks were more influenced by farming than you probably think

Historically interest, collateral, liquidity, inflation and monetary policies were shaped by the needs, risks and patterns of agricultural economies

A few months ago I wrote about LoRA meshes

hello@illya.sh (Illya Gerasymchuk) — Thu, 04 Dec 2025 19:22:11 +0000

A few months ago I wrote about LoRA meshes

So I got a pair of ESP32 devices with a LoRA radio module. They already came pre-flashed with Meshtastic

Took minutes to setup the mesh and send/receive messages.

In my tests, the range was Impressive for such a small device at ≈$10

Added Semantic Categorization Via Embeddings To Articles/Threads On My Website

hello@illya.sh (Illya Gerasymchuk) — Fri, 05 Dec 2025 09:00:03 +0000

Added Semantic Categorization Via Embeddings To Articles/Threads On My Website

You can now filter my articles by topic at https://illya.sh/threads/topics/

Qwen3-Embedding-0.6B is used to vectorize and embed all of the articles/threads, which are then tagged/categorized based on natural language tags for the category.
This allows me to define a new category by defining a new Python class with the topic/category name, description, URL path, and the query sting to embed and query against the thread embeddings. From there, all of the content is generated statically.

Everything runs 100% locally/offline. Model weights are pre-downloaded once - that's the most time-consuming part.

The motivation for implementing this has to with the content's volume. I have written over 180 articles/threads, but until now there was no categorization. So if you wanted to read an article on a particular topic, you'd either have to google it, ask an LLM or go through the list manually yourself. Now, there is an index with topics, which help navigating the content semantically.

Navigate to https://t.co/bXb1JWKD4d, select a topic, and you will be presented paginated list of all threads/articles matching that topic.

Laptop as a Meshtastic LoRa Node Using ESP32, BLE and Python

hello@illya.sh (Illya Gerasymchuk) — Sat, 06 Dec 2025 15:51:27 +0000

Laptop as a Meshtastic LoRa Node Using ESP32, BLE and Python

Meshtastic exposes a BLE interface and comes with a nice Python library. So I connected to the ESP32 with a LoRA module over bluetooth, and was able to send and receive messages from a Python script running on a laptop.

Essentially, the laptop uses the microcontroller as a proxy for the sub-GHz antenna (EU_868/≈868 MHz in Europe), enabling it to send and receive LoRa messages via Meshtastic's firmware. So effectively Bluetooth Low Energy is used as a proxy protocol for LoRa.

There were two nodes in the mesh - one connected to the laptop and another to a smartphone. Both nodes had the same channel name, Pre-Shared Key (PSK) and ordering (channel id) setup. The laptop node was using Python to connect to the mesh via BLE and exchange messages. The smartphone was connected to the other node, and the official Meshtastic app was used to send and receive messages.

The setup is as follows:

💻 Laptop (Python)
⇅ BLE
📡 Node A (ESP32 + LoRa)
≈≈≈ 868 MHz LoRa mesh ≈≈≈
📡 Node B (ESP32 + LoRa)
⇅ BLE
📱 Phone (Meshtastic app)

So you don't really need to program the ESP32 to make it a "smart" LoRa node. You can program all of the logic on your usual dev machine, and use BLE as a proxy for LoRa packets over Meshtastic. This is a great approach for iterative development, prototyping, proof of concepts and even final products. Of course, you can also put the smart node code on a Raspberry Pi, Arduino or even the microcontroller itself.

China Is Hoarding Commodities

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Dec 2025 16:05:03 +0000

China Is Hoarding Commodities

While the U.S. is pumping a crypto & AI bubble, China is pumping their commodity reserves.

Not only PRC is limiting silver exports, but they're also lowering the cost of commodity-related imports.

The net result will be more positive commodity import/export ratio, i.e. more physical commodities within China, which will be used for strategic and industrial needs (China is the world's number one producer).

It also means that there will be less commodities available outside of PRC, and since the global demand won't decrease - that's further positive price pressure on the commodity sector.

I have been writing about gold, silver and other commodities for over 2 years. The same bullish narrative remains valid. These geopolitical developments provide further confirmation.

Today's gold, silver and their miners sell-off is a buying opportunity

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Dec 2025 16:09:53 +0000

Today's gold, silver and their miners sell-off is a buying opportunity

Treat it as an early new year's gift for 2026 🥳

Silver is up ≈193% in 2025, but it only takes a ≈16% pullback for large finance accounts on X to…

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Dec 2025 18:51:48 +0000

Silver is up ≈193% in 2025, but it only takes a ≈16% pullback for large finance accounts on X to suggest it has topped 😄

No, it's not the top for Silver yet and it's not hitting $50 this week

The current pullback in the price of silver & silver miners is a buying opportunity

M2 Money Supply Is A Bad Measure of Global Liquidity

hello@illya.sh (Illya Gerasymchuk) — Mon, 29 Dec 2025 22:50:26 +0000

M2 Money Supply Is A Bad Measure of Global Liquidity

If you're using M2/M3 as a measure of global liquidity, you're under accounting for at least half of "global money supply".

Here's some USD-centric data:

➖ U.S. M2 supply: ≈$23T
➖ U.S. Money Market Funds: ≈$8T
➖ U.S. Repo Markets: ≈$13T

These are USD/U.S. focused figures, so they don't account for global liquidity per se (e.g. PBoC's balance sheet is larger than Fed's), but they do show how M2 falls short of being an accurate proxy for the measure of global monetary/currency supply.

I've written several articles on global liquidity and how to measure it. You can read them free of cost in the threads section of my website.

Silver didn't even break its 4 hour trend support on the pullback and many are already calling…

hello@illya.sh (Illya Gerasymchuk) — Tue, 30 Dec 2025 01:40:59 +0000

Silver didn't even break its 4 hour trend support on the pullback and many are already calling that it has topped for the cycle 😂

Gold hasn't even touched its daily support line from October 2025

hello@illya.sh (Illya Gerasymchuk) — Tue, 30 Dec 2025 16:11:18 +0000

Gold hasn't even touched its daily support line from October 2025

In fact, gold price could fall under $4300 and still be above that support (green line on the chart).

This discounts all theories suggesting a long-term top at current price levels. Gold's price action clearly suggests the continuation of the uptrend into 2026.

This dip is a buying opportunity

Uranium, nuclear energy, electrical grid, lithium and copper have been added to my list

hello@illya.sh (Illya Gerasymchuk) — Wed, 31 Dec 2025 15:13:43 +0000

Uranium, nuclear energy, electrical grid, lithium and copper have been added to my list

Electrification will continue to increase, and that requires not only the production of electricity, but also the setup of all of the electrical infrastructure. AI runs on electricity, data centers need electricity and strong demand for electric lithium-battery powered vehicles (EVs) is here to stay for at least another decade.

You can invest in them using your favorite broker - there's plenty of ETFs, ETCs and equities.

For Uranium and nuclear energy - there are several ETFs that give you exposure to producers, distributors and infrastructure (e.g. nuclear plant maintenance).

Electrical grid investments can be done by acquiring equity in companies that expand and maintain it.

Not recommending any particular investment instruments, but the attached image provides you with a starter list.

The same X accounts that were telling you to buy the Bitcoin dip on October 1st 2025, are now…

hello@illya.sh (Illya Gerasymchuk) — Wed, 31 Dec 2025 17:51:00 +0000

The same X accounts that were telling you to buy the Bitcoin dip on October 1st 2025, are now telling you to sell Silver on December 31st 2025

Since October 1st:
➖Bitcoin down ≈40%
➖Silver up ≈80%

Their silver top calls will age as well, as the Bitcoin dip calls earlier this year 😄

The markets gave you an early 2026 present in the form of a systemic commodity price correction - and it's up to you to take it or not

Happy 2026 🥳

Gold hasn't even touched its daily level uptrend support and finance accounts on X are already…

hello@illya.sh (Illya Gerasymchuk) — Wed, 31 Dec 2025 18:26:29 +0000

Gold hasn't even touched its daily level uptrend support and finance accounts on X are already calling for a top

I have been writing my price thesis on gold for 2 years now, and since my call in December 2023 gold's price is up ≈125%. In the last day or 2025 my call is that this uptrend will continue.

Regarding local tops, it's worth noting that gold has been in one for over 2 months now.

Additionally, closes below a seemingly arbitrary 4H support line drawn on a chart does not imply any significant top or trend reversal. Gold can go down to $3900 and still be in an uptrend!

TA & charting is supportive, as it gives you hints about what the market is doing, but on its own it can't provide you with a high-confidence prediction of the future.

If you lack the foundation on the basis of the price action of an asset, you'll find it much more challenging to distinguish a dip from a longer-term trend reversal. I've written several articles explaining why gold's price will keep going up, in terms of currency debasement, refinancing cycles, global liquidity and geopolitical pressures. You can access those threads/articles on my website free or cost. They'll provide you with a solid basis for understanding gold, where its price headed and why.

Bulgarian Lev has been pegged to Euro since 1999

hello@illya.sh (Illya Gerasymchuk) — Thu, 01 Jan 2026 20:37:36 +0000

Bulgarian Lev has been pegged to Euro since 1999

Bulgarian National Bank (BNB) has been operating under a currency board arrangement (CBA) regime since 1997. First, it was pegged to the Deutsche Mark, then to the Euro. They also redenominated their currency from Old Bulgarian Lev (BGL) to New Bulgarian Lev (BGN).

Under CBA, BNB's monetary liabilities must be fully covered by foreign reserves. In other words, if Bulgaria's Central Bank wanted to increase the base money supply of their national currency (i.e. monetary liabilities on BNB's balance sheet), they needed to foreign reserve assets backing them up at a fixed rate of 1 EUR ≈ 1.96 BGN. In practice, ≈90% of BNB's reserves were Euro-denominated, which makes sense, since BGN is pegged to the Euro.

For those claiming that by adopting the Euro as its official currency on January 1st 2026 Bulgaria has given up its monetary sovereignty - how exactly? BNB has been extremely limited in pursuing discretionary monetary policies since 1997.

LLMs & AI Agents Didn't Replace Programming - They Evolved It

hello@illya.sh (Illya Gerasymchuk) — Fri, 02 Jan 2026 15:09:45 +0000

LLMs & AI Agents Didn't Replace Programming - They Evolved It

I've been programming with LLMs since 2022, implementing systems of varied complexity, both professionally and exploratory/hobby projects. And I will continue to do so in 2026. However, it's important to be aware of its limits.

Vibe/agent coding for critical systems doesn't work well (yet).

You'll also be disappointed if you're trying to do something with financial markets (e.g. Machine-Learning based models).

Vibe coded apps also frequently come with security vulnerabilities (for many apps this may be an acceptable compromise).

I don't think you'd be comfortable with driving a vehicle with all of its software vibe-coded, or with all code written by an agentic system, without thorough human investment.

LLMs are good at solving problems that have been solved many time before, but this abstraction quickly breaks apart if you delve with them into less developed topics, which frequent tend to be more complex. Pattern matching based prediction is very powerful, but you need enough patterns to learn from, alongside the correct context.

Additionally, vibe-coding a large codebase is one thing, while maintaining that same codebase is another.

Autopilot in commercial airplanes didn't deprecate carbon-based human pilots, but it did deprecate pilots who didn't commit to learning and integrating autopilot during the flight.

So is programming really dead, or has it merely evolved? 🤔

The big play on precious metals mining stocks is that production costs remain (much) smaller than…

hello@illya.sh (Illya Gerasymchuk) — Fri, 02 Jan 2026 18:37:35 +0000

The big play on precious metals mining stocks is that production costs remain (much) smaller than the metal's spot price

For gold - the cost to produce/mine 1 oz is roughly $2000. Then, those same miners sell it for more than $4000. Instant >$2000 profit per ounce (again, rough numbers) 😄

So from the current levels, assuming production costs increase less than the spot price of the metal - miners win big. I believe this will be the case.

I wrote a more detailed article explains gold mining costs and miner profits here: https://illya.sh/threads/1-oz-of-gold-production-cost-and-miner-profit

Ruble was the best performing major currency of 2025, and it's easy to understand why

hello@illya.sh (Illya Gerasymchuk) — Sat, 03 Jan 2026 08:27:00 +0000

Ruble was the best performing major currency of 2025, and it's easy to understand why

What Russia did is replace USD-denominated securities (treasuries, bonds, etc) with gold.

Gold is almost 40% of Russia's Central bank balance sheet, compare it to ≈20% for European Union, ≈16% for U.S. and ≈5% for China. This leaves Russia's central bank with a massive balance sheet capacity for the future and supports the Ruble price.

There's also the National Wealth Fund, which commits to buying gold when Urals oil is sold/traded above a certain price.

In 2017, Venezuelan Central Bank (Banco Central de Venezuela/BCV) held ≈162 tonnes of monetary…

hello@illya.sh (Illya Gerasymchuk) — Sat, 03 Jan 2026 19:47:29 +0000

In 2017, Venezuelan Central Bank (Banco Central de Venezuela/BCV) held ≈162 tonnes of monetary gold in its balance sheet

By 2025, that number was reduced by ≈67%, down to ≈53 tonnes.

I'll do a more detailed breakdown of Venezuela's gold holdings relative their balance sheet size in a follow-up post.

As or 2026, Venezuela has ≈53 tonnes of gold, not 161

hello@illya.sh (Illya Gerasymchuk) — Sun, 04 Jan 2026 09:48:04 +0000

As or 2026, Venezuela has ≈53 tonnes of gold, not 161

I've taken these numbers directly from Banco Nacional de Venezuela (BCV) balance sheet for 30th June 2025.

I am now seeing claims about Venezuela having 161 tonnes of gold, which are incorrect. The 161 tonnes likely refers to the 2017 amounts BCV held.

Misinformation About Venezuela's Gold Reserves Is Spreading 🇻🇪

hello@illya.sh (Illya Gerasymchuk) — Sun, 04 Jan 2026 15:47:43 +0000

Misinformation About Venezuela's Gold Reserves Is Spreading 🇻🇪

It appears that once a large finance account on X posts misinformation about Venezuela's gold reserves, many other large-following X accounts repost it without even bothering to verify the information.

Banco Central de Venezuela (BCV) doesn't have anywhere close to 161 tonnes of gold - those are numbers from 2017. BCV's balance sheet report, alongside the auxiliary notes released with it (specifically Note 7) from June 30th 2025 point at ≈53 tonnes of gold, which is less than a third of the claimed 161 tonnes of gold figure. I know this for a fact, because I checked that balance sheet statement myself.

On my feed, the incorrect 161 tonnes figure started with @KobeissiLetter post earlier today, from there, it continues to spread throughout numerous accounts, many of which have followings in the millions.

My goal is not to criticize or attack the accounts spreading this incorrect information, but to incentivize checking the information yourself before reposting/spreading it.

In a follow-up post I'll do a more detailed breakdown of BCV's balance sheet, especially in terms of gold, so stay tuned.

Gold is special because it's nobody's liability

hello@illya.sh (Illya Gerasymchuk) — Sun, 04 Jan 2026 16:09:28 +0000

Gold is special because it's nobody's liability

It's NOT about paying the debt, but BEING ABLE to pay the debt

hello@illya.sh (Illya Gerasymchuk) — Sun, 04 Jan 2026 16:11:18 +0000

It's NOT about paying the debt, but BEING ABLE to pay the debt

This is true for corporations, individuals and governments:

➖ For corporations, debt provides a tax shield (interest payments is an accounting expense)

➖ For individuals, it allows to front-run price increase in a monetary debasement/inflationary economy

➖For governments, it allows for more flexibility in pursuing their macroeconomic, social, geopolitical and monetary policy goals.

Why do you think central banks have gold and foreign currencies in their balance sheet backing up their local currency? It's about having enough assets and liquidity to cover your liabilities.

The U.S. Violated International Law By Attacking Venezuela and Capturing Maduro

hello@illya.sh (Illya Gerasymchuk) — Mon, 05 Jan 2026 13:54:18 +0000

The U.S. Violated International Law By Attacking Venezuela and Capturing Maduro

Both the U.S. and Venezuela are signees & parties of the UN Charter, making it a legally binding treaty for both countries. This means that both of the countries are forbidden from using force against sovereign states, as per Article 2(4), which states:

➖ "All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations."

Crossing the border with military force to seize someone is clearly a "use of force" against that state, meaning it's a violation of the provision.

There are some exceptions to Article 2(4), such as self-defense in responding to an armed attack (Article 51), prior authorization for force by the UN Security Council and . United State's actions do not fall under those exceptions. As such, USA is in violation of Article 2(4) of the UN Charter, making their actions illegal under the international law.

Even if the U.S. that they are not in violation of their national laws, they would still be violating the international law. Vienna Convention on The Law of Treaties (VCLT) is the "treaty about treaties", by outlining base rules for how treaties are made, interpreted, applied and ended. Article 27 of VCLT states:

➖ "A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty."

Regarding VCLT, the U.S. signed it in April 1970, but they didn't ratify it/they're not a party in it, meaning it's not a directly legally binding treaty for the U.S. However, U.S. courts often treat VCLT as an authoritative guide to customary international law of treaties.

Additionally, Article 103 of the UN Charter puts the obligations outlined in the UN Charter above any other treaty obligations, meaning that Article 2(4) must be respected:

➖"In the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail."

If the U.S. takes military action against Cuba, Cambodia, Denmark (Greenland) or any other sovereign in a similar manner, it would equally be a violation of the international law.

Interestingly enough, in 1945 the U.S. helped to draft the same UN Charter that it is now violating.

Bulgraria has been pegged to Euro since 1999 🇧🇬

hello@illya.sh (Illya Gerasymchuk) — Tue, 06 Jan 2026 13:03:18 +0000

Bulgraria has been pegged to Euro since 1999 🇧🇬

Bulgaria has adopted Euro as its official currency and legal tender on January 1st 2026.

As you may have expected, there is now a lot of discourse about how this is bad for Bulgaria, because Euro is bad and Bulgaria has now given up their "monetary sovereignty".

What the ones pushing that narrative have not expected is for the Bulgarian lev (BGN) to be a proxy for Euro for almost 3 decades now. So it's not very clear which sovereignty Bulgaria gave up on January 1st 2026, when it became a full Eurozone member.

Since 1997 Bulgaria has operated under a currency board arrangement (CBA), which is an exchange rate regime where a country commits to keep its local currency to a fixed exchange rate against an anchor currency.

Under CBA, the adhering country fixes the exchange rate of its local currency to an anchor currency, its national central bank fully backs its monetary liabilities with foreign reserves (to create local currency the national central bank must have foreign currency assets to back it up, thus ensuring stable convertibility), and the country foregoes its right to adapt discretionary monetary policy (e.g. inflation rate targeting).

On July 1st 1997, Bulgaria introduced the currency board, pegging lev (BGL) to the Deutsche Mark (DM). On January 1st 1999, Bulgaria switched the anchor currency from Deutsche Mark to Euro, with the exchange rate fixed at €1 = 1.95583 BGN (≈0.5 BGN/EUR).

So the Bulgarian National Bank (BNB) neither had the sovereignty to manage the broad and base supplies of its local currency (Bulgarian lev/BGL/BGN), nor to freely pursue monetary policies since July 1st 1997.

Given this, any discourse about how Bulgaria's entry into the Eurozone implies a dramatic change to its monetary sovereignty is likely unfounded. It didn't happen overnight - it's been an almost 30 year long process. Joining the Eurozone does, however, remove the pegging frictions for Bulgaria, and allows them to fully integrate into the monetary union.

Venezuela's Central Bank Monetary Gold Holdings Constitute ≈20% of Their Balance Sheet

hello@illya.sh (Illya Gerasymchuk) — Thu, 08 Jan 2026 12:13:42 +0000

Venezuela's Central Bank Monetary Gold Holdings Constitute ≈20% of Their Balance Sheet

Gold is also ≈47% of Venezuela's international reserve assets.

This comes directly from Banco Central de Venezuela (BCV), which reports a total of ≈53 tonnes of gold worth ≈0.6 Trillion VES (Venezuelan Bolívar, also known as Bs), or ≈5.58 billion USD.

In 2021, Reuters reported that ≈31 tonnes of Venezuela's Centeal Bank gold was stored in the UK, under the custody of Bank of England (BoE). A quick search didn't yield precise figures for 2026, as it appears that that information is not reported publicly in detail. The access to that gold at BoE is currently blocked, over a legal dispute regarding who has the authority/control over that gold - Maduro-appointed BCV board or Guaidó-appointed board. Thus, a significant portion of Venezuela's gold is abroad and frozen, which matters in terms of geopolitical risk.

BNV's 20% are relatively high gold amounts against the central bank's total balance sheet size, surpassing U.S.'s Fed (≈16%), China's PBoC (≈5%) and just above European Union's ECB + Eurosystem (≈19.1%), but well behind Russia's BoR (≈36%).

Congratulations to Freddie Mac & Fannie Mae in their first steps at becoming a central bank

hello@illya.sh (Illya Gerasymchuk) — Sat, 10 Jan 2026 15:56:41 +0000

Congratulations to Freddie Mac & Fannie Mae in their first steps at becoming a central bank

Looks like it's not just the Fed doing MBS-targeted QE now. Why control the Fed, when you can just move the Fed? 😆

So silver didn't top for the cycle, 2011 didn't repeat and instead less than 2 weeks later it hit…

hello@illya.sh (Illya Gerasymchuk) — Mon, 12 Jan 2026 17:45:13 +0000

So silver didn't top for the cycle, 2011 didn't repeat and instead less than 2 weeks later it hit another all time high

Imagine my surprise 😄

More all time highs are coming and, as I've written before, you can safely ignore any calls for long-term top.

You can't find a top on chart without understanding what drives the price on that chart in the first place. Luckily for you - I've written a lot of explanations on that when it comes to gold and silver

📖 Quoted from 2025-12-30 01:40
https://illya.sh/thoughts/silver-didnt-even-break-its-4-hour-trend-support-on-the
Silver didn't even break its 4 hour trend support on the pullback and many are already calling that it has topped for the cycle 😂

If you want to invest in copper miners, just go with the Global X Copper Miners ETF

hello@illya.sh (Illya Gerasymchuk) — Tue, 13 Jan 2026 12:02:26 +0000

If you want to invest in copper miners, just go with the Global X Copper Miners ETF

This is especially true if your main goal is getting exposure to the price action in the copper mining segment without spending too much time on it.

Not saying that you shouldn't invest in individual equities, but don't invest in a company just because someone mentioned their ticker on the internet.

Diversifying makes all of the sense in these cases in terms of risk/reward.

This exchange-traded fund is domiciled in the U.S., but also available to retail EU investors via an equivalent UCITS product, so you should be able to find it listed by your preferred broker.

Fund information:
➖ Ticker: COPX
➖ U.S. ISIN: US37954Y8306
➖ EU ISIN: IE0003Z9E2Y3

You can read the full article on gold revaluation, its low-level mechanics and impact on the U.S.…

hello@illya.sh (Illya Gerasymchuk) — Tue, 13 Jan 2026 12:05:47 +0000

You can read the full article on gold revaluation, its low-level mechanics and impact on the U.S. here ⬇️
https://illya.sh/threads/gold-revaluation-will-not-solve-the-us-debt-problem

Putin Instructed Central Bank of Russia To Buy Gold In 2005

hello@illya.sh (Illya Gerasymchuk) — Wed, 14 Jan 2026 12:15:04 +0000

Putin Instructed Central Bank of Russia To Buy Gold In 2005

In 20 years, Russia's share of gold in their central bank's international reserves account increased by a factor of ≈12.1 times.

At the start of 2026, gold represents ≈43% of Bank of Russia's (BoR) international reserves. Back in 2005, gold accounted for a mere ≈3.5% of the same reserves account.

The move to gold was mainly motivated by the desire to diversify away from the U.S. Dollar and the explicit goal of increasing BoR's holdings of gold relative to foreign exchange assets. On November 22nd 2005 Putin stated:

➖ "I believe it's necessary for the Central Bank to pay more attention to precious metals within the territory of the Russian Federation when forming gold and foreign-currency reserves. Those reserves are even called 'gold and foreign-currency' reserves. There's nothing to be shy about here."

Since Vladimir Putin instructed Bank of Russia to start buying more gold, gold is up ≈840%, i.e. almost 10 times. In the same period, S&P 500 TR increased ≈726%, or almost 9 times. This means that Putin's strategy outperformed the U.S. stock market index by ≈14%. Perhaps the president of Russia should start his own investment fund?

Gold miners are about to breakout

hello@illya.sh (Illya Gerasymchuk) — Thu, 15 Jan 2026 14:54:02 +0000

Gold miners are about to breakout

It looks like gold miners are about to appreciate relative to gold, as you can see on the multi-year ascending triangle on the chart. Given that I don't expect gold to have any significant medium-to-longterm pullbacks, this means that gold mining stocks are setup to appreciate more than gold.

The next significant medium to long-term resistance zone is ≈60% higher, meaning that miners have room to appreciate significantly more relative to the price of gold.

The chart is on a monthly level and it shows the ratio between the price of gold miners index and gold futures.

Why wouldn't markets be able to react to Trump's new tariffs on Europe until Monday night?

hello@illya.sh (Illya Gerasymchuk) — Sat, 17 Jan 2026 18:01:32 +0000

Why wouldn't markets be able to react to Trump's new tariffs on Europe until Monday night?

Markets may be closed in the U.S. on Monday, but they're open in Europe and Asia.

The market isn't going to wait for the U.S. to react 😂

Silver Mining Stocks Are Undervalued In 2026

hello@illya.sh (Illya Gerasymchuk) — Sun, 18 Jan 2026 14:41:36 +0000

Silver Mining Stocks Are Undervalued In 2026

*Below is my 5-minute analysis on silver miners equity prices for 2026

The price ratio of silver miners to silver is at some of its lowest levels in history, roughly at the same values as it was in the 2000’s. The ratio is currently sitting on a support from 2014-2015 inside of a multi-year upward price channel. Alongside the macroeconomic and geopolitical fundamentals, this setup’s potential upside gain justifies the limited downside risk. Unless silver experiences a large medium-to-longterm pullback, silver mining equity prices are set to increase against the price of silver. For this to happen, there are 3 high-level scenarios:

1️⃣ Silver price remains above ≈$88: silver miners appreciate more than silver

2️⃣ Silver price remains above ≈$83: silver falls in price, miners fall less or increase

3️⃣ Silver price remains above ≈$70: silver falls in price, miners fall less (more likely) or increase

Given the increasing demand for physical silver combined with currency debasement driven by refinancing needs, I don’t believe silver’s spot price will experience a pullback to lower than the ≈$70 level in 2026. Pullbacks below ≈$70 are more likely to trigger a larger sell-off in silver miners, potentially even pushing the ratio further down, meaning that silver mining stocks fall in price more than silver.

Silver producers/miners, royalty and streamers can be a great source of diversification and even "hedging" of your silver investments without ever leaving the commodities sector. You can further diversify your exposure to other metals by acquiring fund units and/or equities in producers, royalty and streamers that focus on more than two metals (e.g. there are companies mining gold, silver and copper).

A few days ago, I wrote a post about how gold miner prices are set to breakout. But silver is not gold. Silver miners will be more volatile than gold miners, but given a positive correlation between gold and silver prices, they will tend to follow the gold miner’s direction. After all, most gold mining companies mine silver and vice-versa (silver is often mined as a byproduct of other metals like gold, copper, lead and zinc). The attached chart shows the ratio between the price of Hecla Mining and Pan American Silver, so it doesn’t include all silver miners, but you’ll find a similar structure in silver equity-based indices against the spot/futures price of the metal.

In the longer timespan (e.g. 3+ years), miners may underperform the underlying metal. This analysis is written with a focus on the current price levels with a timeframe of 1 year from now. Given that this article was written in January 2026, you can consider this as a guide for the remainder of 2026. Physical silver is not the same as silver miners. The mining sector is exposed to an array of risks distinct from the metal, with the highest one currently being the geopolitical risk in the form of armed conflict (destruction, supply chain disruption) and legal changes (sanctions, tariffs, export/import limits). Thus, even if the price of the physical metal goes up, miners price can collapse. The same risks can put upwards pressure on the metal and downward pressure on the miners simultaneously. I don't believe these risks will materialize sufficiently for miners by the end of 2026, and given the upside price pressure on commodities, miners will also ride that price wave up.

Even As Central Banks Bought Gold, The Market Analysts Remained Bearish

hello@illya.sh (Illya Gerasymchuk) — Mon, 19 Jan 2026 15:38:09 +0000

Even As Central Banks Bought Gold, The Market Analysts Remained Bearish

* This goes to the list of "things that are obvious in hindsight"

In 2014 Forbes published an opinion saying that increased gold buying by Central Bank of Russia (CBR) isn't an indicator of positive price pressures for gold.

Gold's price has more than quadrupled since then, going from ≈$1600/oz in November 2014 to ≈$4600/oz as of January 19th 2026.

The article frames the purchase as "forced", when commenting the fact that CBR decided to increase the share of gold in the "gold and foreign exchange reserve assets" item in their balance sheet. It is not by chance that this central bank accounting item explicitly includes "gold" in its name.

The Forbes article also seems to assume that miner profit margins don't spread cross-border.

Another thing that the article omits is that a central bank can buy gold without expanding the base monetary base (i.e. "printing" new currency), for example by swapping FX reserves for gold via a single or multi-leg sale.

Yesterday, I explained why silver mining stocks are undervalued in 2026

hello@illya.sh (Illya Gerasymchuk) — Mon, 19 Jan 2026 15:57:08 +0000

Yesterday, I explained why silver mining stocks are undervalued in 2026

Today, silver miners are up almost 6% across major FX currencies 😄

Of course, it's to early to tell whether my thesis is correct, but I'll throw in another prediction: this upward price movement in miners to continue.

Every day it becomes more obvious how US tariffs, unilateral sanctions & multi-faceted…

hello@illya.sh (Illya Gerasymchuk) — Tue, 20 Jan 2026 14:22:56 +0000

Every day it becomes more obvious how US tariffs, unilateral sanctions & multi-faceted geopolitical aggression including towards its allies and major trade partners is a strategic mistake

Expect this trend to continue throughout 2026

Good For Gold, Bad For USD: US Tariffs on Europe

hello@illya.sh (Illya Gerasymchuk) — Tue, 20 Jan 2026 14:50:08 +0000

Good For Gold, Bad For USD: US Tariffs on Europe

The tariffs imposed by the U.S. on the European countries are detrimental to USD's position as a reserve currency. A capital outflow out of the U.S. dollar creates positive price pressure on gold via increased demand.

This is true regardless of the U.S. Supreme Court's decision on whether President Trump can lawfully impose unilateral broad tariffs via executive order using the the International Emergency Economic Powers Act (IEEAP).

At the high level, there's two moves for gold here:

➖ If the tariffs are deemed illegal and the collected tariff revenue must to refunded - which would lead to an increase of USD supply accessible to the wider economy. The refund would come either from existing reserves, thus directly increasing broad money or from newly issued debt, which may reduce broad money in the short-term, but the newly issued bonds will eventually be rehypothecated, thus effectively increasing USD credit/effective supply. This is positive price pressure on gold, at the very least due to the increase in liquidity. This is negative price pressure on USD, due to increased supply & public debt of the issuer.

➖If the tariffs are deemed legal, and/or do not need to be refunded, the geopolitical and liquidity risk remains, which materializes in a lower incencitve to own USD. After all, why would you want to hold a currency, whose purchasing power/liqudity may be reduced every other week after the markets close on a Friday? Gold is the natural outflow path from USD, especially at sovereign/central bank level.

If the Eurozone wants to reduce their USD exposure in the next 5 years, what can they do? The European countries may not want to start significantly increasing the share of renminbi in their FX reserves just yet. Additionally, EU could position Euro as an alternative to USD for settlements, as EUR is already the second most used currency for international trade & FX turnover, second only to USD. Gold presents itself as an attractive alternative to USD, even if the focus on increasing its tonnage in the reserves is transitory. At the very least, increasing the share of gold relative to the balance sheet size in the Eurozone, would increase foreign exchange rate value of Euro and/or would provide basis for monetary expansion in the future.

Many forget that the "gold and foreign exchange reserves" are a single asset-side item in central banks balance sheets. "Gold" is explicitly discriminated among all other assets/commodities, while all currencies and their derivatives (e.g. sovereign bonds) are clustered under the generic "FX reserves" name. Across all currencies, renminbi is best positioned to increase its share in reserve assets and international settlement. Unlike renminbi, gold is nobody's liability and has no counterparty risk (assuming no jurisdiction risk, which can be greatly mitigated by storing the gold bullion domestically).

Given this, I expect the European countries to increase their gold holdings, via a combination of swaps from USD-denominated assets for gold and other FX currencies like the Chinese Yen.

Maybe, just maybe the EU will start swapping their USD-denominated reserves for gold and (at least…

hello@illya.sh (Illya Gerasymchuk) — Tue, 20 Jan 2026 16:46:05 +0000

Maybe, just maybe the EU will start swapping their USD-denominated reserves for gold and (at least eventually) renminbi 😉

First European pension fund - the Danish pension fund AkademikerPension, started selling US…

hello@illya.sh (Illya Gerasymchuk) — Tue, 20 Jan 2026 17:02:51 +0000

First European pension fund - the Danish pension fund AkademikerPension, started selling US Treasuries. Eurozone countries may start doing the same soon. I've been writing for a long time about how swapping USD-denominated reserves for gold would've been the best response to the tariffs.

8 months later, Japan's 30 year bond yield is now ≈32% higher

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 Jan 2026 06:30:00 +0000

8 months later, Japan's 30 year bond yield is now ≈32% higher

The yields on the 30Y Japanese bonds is approaching 4%. The yields are up across the whole tenor curve.

Soon, BoJ will have little options left but to resume QE and lower interest rates, and thus expand the Yen monetary base in an effort to reduce government refinancing costs (A.K.A. government bond yields).

I first wrote about this almost a year ago. The thesis for 2026 and onwards remains the same.

📖 Quoted from 2025-05-21 12:48
https://illya.sh/thoughts/a-month-ago-me-and-gemini-2-5-pro-deep-research-had-a
A month ago me and Gemini 2.5 Pro Deep Research had a disagreement

🇯🇵 Gemini said Japan will continue with QT, while I think they will be back to QE soon

With Japanese bond yields at ATHs - which one of the scenarios do you find more likely? 😁

Yesterday I wrote an article explaining why US tariffs on Europe mean more expensive gold and…

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 Jan 2026 09:56:25 +0000

Yesterday I wrote an article explaining why US tariffs on Europe mean more expensive gold and cheaper US dollar

Today, gold hit a new all time high & you should expect this trend to continue

If you haven't read the article yet, you can do it here: https://illya.sh/threads/good-for-gold-bad-for-usd-us-tariffs-on-europe

Silver miners are up another ≈4% today, and more than 10% in the last 5 days 😄

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 Jan 2026 11:06:17 +0000

Silver miners are up another ≈4% today, and more than 10% in the last 5 days 😄

But this is unsurprising to you if you read my articles from a few days ago on miner/producer equity prices and why they present a great investing opportunity for this year

📖 Quoted from 2026-01-19 15:57
https://illya.sh/thoughts/yesterday-i-explained-why-silver-mining-stocks-are
Yesterday, I explained why silver mining stocks are undervalued in 2026

Today, silver miners are up almost 6% across major FX currencies 😄

Of course, it's to early to tell whether my thesis is correct, but I'll throw in another prediction: this upward price movement in miners to continue.

Copper is another great buy for 2026 at current prices

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 Jan 2026 11:12:45 +0000

Copper is another great buy for 2026 at current prices

I'll write an article explaining why in more detail soon, so stay tuned!

Copper Is A Great Investment In 2026 - Technicals & Fundamentals Explained

hello@illya.sh (Illya Gerasymchuk) — Wed, 21 Jan 2026 12:39:37 +0000

Copper Is A Great Investment In 2026 - Technicals & Fundamentals Explained

*A big part of this analysis also applies to copper miners, but I prefer to cover that in a separate article

From a technical standpoint, copper is currently flipping a ≈20 year old resistance for support. On a monthly chart, copper is in a multi-year upwards channel, and it’s now close to the upper trend line of that channel. Copper is also at record lows when priced in terms of gold and silver.

From a fundamental, supply/demand perspective, copper is required for electrification, data centers, new buildings, electric vehicles, and electric appliances in general.

International Copper Study Group (ICSG) expects refined copper’s demand to surpass the available supply/production in 2026. Given that new copper mines are slow to build, increasing the supply of copper requires great investments of capital and time, and in case of continued increase of global copper demand, it may take decades for the production to meet that demand fully.

This creates a setup for a significant upwards price pressure on copper from current levels.

It's also important to be aware of the metal's general price action. Copper is not gold - copper is significantly more volatile, but post 2021, the volatility has been more compressed to the upwards channel structure described above and shown in the chart.

Regarding the maximum drawdown from the current price levels (≈$5.90/lb), I don’t believe that copper will correct more than ≈15%, as there it will find a strong support area, and soon after the bottom support trend line from the monthly upwards channel, both of which will exert strong buying pressure. Within 6 months from now, I expect copper’s price to be above the current levels. This a risk-adjusted timeframe in which you should frame the current thesis - so it means that, for the same amount of capital, your investments in copper from today will be yield significantly more than they would in at the prevailing rate in money market funds. Realistically, I think it will happen much sooner than 6 months.

In addition to everything above there is also monetary debasement, debt refinancing walls and negative pressures on USD dominance as a reserve currency. These 3, alongside the geopolitical tensions present an additional source of positive price pressure on the whole commodity sector. My copper price thesis is positioned within this liquidity flow into commodities. I’ve covered these points in detail in my previous posts.

Don't Overthink Commodity Miners Investments

hello@illya.sh (Illya Gerasymchuk) — Thu, 22 Jan 2026 11:29:29 +0000

Don't Overthink Commodity Miners Investments

I'm now coming across several large finance accounts on X, which are sharing the results of their miner equity picks from 2025 made available to groups/newsletters/communities with paid access. The results from their buy calls from just a few months ago look impressive - price more than doubling isn't uncommon. The keywords here are *isn't uncommon*. A 2x gain in the mining sector since November 2025 isn't impressive. When evaluating the quality of the calls, it's important that you establish the correct baseline.

One examples of such buy calls was shared by Peter Schiff, who posted his investment suggestion from November 2025 on Nexa Resources S.A. (NYSE: NEXA), which is a miner/producer of zinc, copper, silver and some gold. Since November 2025, its stock price has more than doubled. This was shared as a part of a paid newsletter, whose November 2025 issue was made available to the public. While a >100% price increase may seem impressive, you could've been better off by just investing in a larger, well established miners like Hecla, which are subjects to a smaller set of risks.

Speaking numbers, you could've achieved a similar x2 gain since November 2025 by acquiring Hecla Mining Company stock (NYSE: HL) instead. Hecla is a well-established gold, silver, zinc and other metals miner with more than 60 years of price action dating back to 1964. In contrast, Nexa's price action dates back only by less than a decade - to 2017. As such, you can achieve the result at the cost of a smaller risk. I've shared Hecla Mining several times in my lists on my website throughout 2025 at no cost. I probably also shared others, but Hecla is the one that first comes to mind.

Here's what's important to understand:

There's a global liquidity inflow into the commodities sector, which includes miners, producers & Co equities. The alpha comes from identifying outperformers relative to the index, conditional to risk. Well-established, long running companies generally come with a lower risk profiles, compared to less well established or juniors.

The question isn't whether you can get more upside gain with smaller cap miners/juniors, the question is whether that extra potential gain justifies the extra risk and cost. Frequently the most obvious choices are the best ones. Investing into several miner/producer indexes, alongside a few individual well established, large-cap picks may be all that you need.

Silver Miners Are Up ≈12% Since My Recommendation From 4 Days Ago

hello@illya.sh (Illya Gerasymchuk) — Thu, 22 Jan 2026 16:09:02 +0000

Silver Miners Are Up ≈12% Since My Recommendation From 4 Days Ago

On January 18th 2026 I wrote an article explaining why silver mining stocks are undervalued, and how you should expect a price increase/breakout in the sector soon. 4 days after I published the article, the silver miners index is up more than 10%, and some individual large-cap names like Hecla Mining (whom I use for my longer-term silver miners proxy) are up more than 20%.

You can read the article on silver miners outlook for 2026 here: https://illya.sh/threads/silver-mining-stocks-are-undervalued-in-2026

And this is why copper is currently a good idea to complete gold and silver 😄

hello@illya.sh (Illya Gerasymchuk) — Fri, 23 Jan 2026 13:40:45 +0000

And this is why copper is currently a good idea to complete gold and silver 😄

Gold > $5000

hello@illya.sh (Illya Gerasymchuk) — Fri, 23 Jan 2026 17:43:59 +0000

Gold > $5000
Silver > $100
Copper > $6

And people still think that silver and Bitcoin are within the same category of assets

hello@illya.sh (Illya Gerasymchuk) — Sat, 24 Jan 2026 12:07:40 +0000

And people still think that silver and Bitcoin are within the same category of assets

(hint: they're not)

"Random forest" is currently my favorite term from financial ML

hello@illya.sh (Illya Gerasymchuk) — Sat, 24 Jan 2026 16:47:26 +0000

"Random forest" is currently my favorite term from financial ML

... TREES MAKE FINANCIAL DECISIONS NOW?? 🌳😄

Natural Gas Prices Are Very Volatile

hello@illya.sh (Illya Gerasymchuk) — Tue, 27 Jan 2026 14:44:59 +0000

Natural Gas Prices Are Very Volatile

It's normal for natural gas prices to increase or decrease sharply. Among others, the demand for it is dependent on weather and subject to seasonality. This is very intuitive: if it's colder, there is an increased demand for heat (fuels), and natural gas is that fuel.

The spike in natural gas prices in January 2026 can be explained by the severe cold/snow storms and their effects on supply, demand and storage across the United States and Europe.

But you don't need to know any of that. All you have to do is open a historical price chart for natural gas.

From 2020 to 2022, natural gas prices increased almost ≈x6.5 in price. Then, from 2022 to 2024, the prices fell by ≈84%, bottoming just ≈6% above the 2020 lows.

Thus, any sources proclaiming that "it is not normal" for NATGas to increase 70% in roughly two weeks, implying that it's a signal of a major distress in the system, are unlikely to be a reliable source on this topic.

Today's Commodity Miners Sell-Off Is A Buying Opportunity

hello@illya.sh (Illya Gerasymchuk) — Tue, 27 Jan 2026 16:33:00 +0000

Today's Commodity Miners Sell-Off Is A Buying Opportunity

I've made numerous such calls in the past, and they were correct 100% of the time. Today, I'm making one of such calls again.

Gold, silver and copper miners are down today, with indices and individual large caps falling by as much as ≈8%, despite the underlying metals remaining in the green. This is exactly the situation where you can leverage the increased volatility in the mining sector to increase your exposure to the underlying metals during an uptrend.

I expect the prices of gold and silver miners indices to increase by ≈30% from current levels within roughly 10 trading weeks from now. It may happen sooner than though - pay close attention to the price action.

It's also possible for the price to dip lower than the current levels before the upwards move described above materializes. This mainly depends on the price action of the precious and industrial metals in the next few weeks, but I don't believe that either one of them has topped for the cycle, thus uptrend resumption is imminent.

I've written several articles explaining why commodities and commodity miners are a great investment for 2026. I suggest you to read them if you haven't done so yet.

A week ago I wrote an article explaining why copper is a great investment in 2026

hello@illya.sh (Illya Gerasymchuk) — Thu, 29 Jan 2026 10:06:52 +0000

A week ago I wrote an article explaining why copper is a great investment in 2026

Today, copper is up ≈5%, hitting a new all time high

The article covers copper's technicals and fundamentals. You can read it here:
https://illya.sh/threads/copper-is-a-great-investment-in-2026-technicals-fundamentals

Copper just hit a new all time high, and it's not stopping here

hello@illya.sh (Illya Gerasymchuk) — Thu, 29 Jan 2026 10:32:59 +0000

Copper just hit a new all time high, and it's not stopping here

The white rectangle on the chart represents copper's support area for 2026. Copper will have a lot of buying pressure waiting inside that box.

This is a monthly chart, with the support area being formed over the last ≈5 years, since 2021.

Copper extends its gains to ≈9% on the day, and its appreciating more than gold and silver

hello@illya.sh (Illya Gerasymchuk) — Thu, 29 Jan 2026 14:17:35 +0000

Copper extends its gains to ≈9% on the day, and its appreciating more than gold and silver

A week ago I wrote an article explaining why this upwards move in copper (and copper miners!) was imminent, from both fundamental and technical standpoints.

And don't be alarmed by near-term volatility. Keep the macro picture in mind under the lens of liquidity inflow into the commodity sector. I've explained this extensively in my articles. You can read them all on my website for free (there is also an RSS feed you can subscribe to).

Cherry-picking goes both ways 😉

hello@illya.sh (Illya Gerasymchuk) — Thu, 29 Jan 2026 14:30:16 +0000

Cherry-picking goes both ways 😉

Copper already up ≈10% on the day

Palladium Is A Great Investment In 2026

hello@illya.sh (Illya Gerasymchuk) — Thu, 29 Jan 2026 14:42:49 +0000

Palladium Is A Great Investment In 2026

Palladium already more than doubled since 2025, but its upwards move won't stop here, as it's setup to appreciate against both, USD and gold.

As I've previously explained, the current commodities supercycle will lead to a price increase across the whole set of commodities, which includes precious and industrial metals and their miners. Palladium is very well positioned for the next leg of liquidity inflow.

Against USD, palladium is currently trading at ≈$2075/oz. My 2026 target for Palladium is at least ≈$2500/oz, or up another ≈24% from current price levels. Platinum has recently rebounded from its monthly support line.

Against gold, palladium is in a similar situation, as its rebounding from a monthly support trend line. The current Palladium/Gold ratio is at ≈0.38. I expect it to rebound upwards to at least ≈0.7, meaning that palladium is setup to appreciate against gold. Even if gold retraces in the short-to-medium term, I don't expect that price drop be to neither permanent, nor long-lasting.

There is also an ongoing deficit of palladium supply relative to its demand.

My Target For Gold Is At Least ≈7500 USD Per Ounce

hello@illya.sh (Illya Gerasymchuk) — Thu, 29 Jan 2026 15:03:27 +0000

My Target For Gold Is At Least ≈7500 USD Per Ounce

I would like to clarify that this is my *minimum*, medium-to-longterm target for this commodity cycle.

Gold reaching $7500 wouldn't be anything out of the ordinary. It may happen faster than you think.

Enjoy the price dip across communities

hello@illya.sh (Illya Gerasymchuk) — Thu, 29 Jan 2026 16:05:51 +0000

Enjoy the price dip across communities

This is, once again, a buying opportunity

Massive buying opportunity in commodities with these pullbacks

hello@illya.sh (Illya Gerasymchuk) — Fri, 30 Jan 2026 18:04:24 +0000

Massive buying opportunity in commodities with these pullbacks

Metropolitan Capital Bank & Trust is the first US bank to fail in 2026

hello@illya.sh (Illya Gerasymchuk) — Sat, 31 Jan 2026 10:39:26 +0000

Metropolitan Capital Bank & Trust is the first US bank to fail in 2026

January 30th 2026: Metropolitan Capital Bank & Trust was closed by the Illinois Department of Financial and Professional Regulation, appointing the Federal Deposit Insurance Corporation (FDIC) as the receiver.

The failure is expected to cost the Deposit Insurance Fund (DIF) ≈$20M, but it can changed depending on the price the failed bank's assets are liquidated at.

Back in August 2019 the same bank was formally accused and investigated for unsafe and unsound banking practices by the regulators (FDIC, IDFPR). It was concluded that there were weaknesses in liquidity, solvency, management and asset quality. As a result of that, the bank was forced into a corrective action plan.

AI will follow a much more logarithmic growth than the hype may lead you to believe

hello@illya.sh (Illya Gerasymchuk) — Tue, 03 Feb 2026 12:58:26 +0000

AI will follow a much more logarithmic growth than the hype may lead you to believe

We've been perpetually '6 months away from AGI', yet as amazing the SOTA generative models are - we're no where near that.

I don't believe that the current generative ML architectures will be enough to deliver the promises even over the next decade. Generative models have their limits.

There's also a massive AI bubble in the U.S., wit the same entities over promising on results directly benefiting from public funds, which get counted as revenue many times over. Maybe this need a new term like, rerevenuezation (like rehypothecation with bonds) 😄

With that said, I don't think we're anywhere near the full benefits just from the tech we have available up to today. Agentic systems in particular.

No AGI With LLMs In Their Current Form.

hello@illya.sh (Illya Gerasymchuk) — Thu, 05 Feb 2026 17:07:46 +0000

No AGI With LLMs In Their Current Form.

Generative models are just one type of models in ML. Neither self-driving cars, nor inference about financial data primarily rely on generative models. Perhaps you can have LLM program that logic on the go, but that would require the LLM to effectively dominate those tasks (i.e. effectively become good at driving a car and being able to build sound financial models via a programming language), and given the probabilistic nature of the inference I don’t think we can have LLMs and agents fully taking over these critical areas. Regarding the probabilistic nature, I’m specifically referring the unsecured/unparameterized probability - it’s hard to modulate the potential error.

Right now, agent setups are very good at boilerplate, repeatable code - and most of the code is like that. Most of software development is already abstracted by various frameworks, and a lot of the softwares do very similar tasks and are implemented in similar ways, following specific patterns. Anecdotally, think of a generic SaaS - there are several competing products that do basically the same thing, because they solve a common problem. Agents/LLMs are already great at predicting code of which they have a lot of examples in their training set. This alone, is a massive productivity boost, especially if you are prototyping/iterating.

To give a more concrete answer, the current tech would probably top out at multi-agent, multi-model and some form of DSL(s). So you would have multiple agents, some of them using distinct models. For example, one model for planning, another model for writing code, another model for debugging, etc. The DSLs would be used for both: customizing agents and models (input) and the model would output the code in a DSL (output). So when you ask the model to generate code, it would output it in a higher-level programming language/DSL, and then that one would either be compiled down/translated into a different target, wether that is machine code or a programming language like Python. The DSL design would be optimized for this “generative development” - in practice it will make things like math-induced security issues more difficult for LLMs to make (e.g. the DSL forces the LLM to use pre-defined cryptographic primitives, and at compilation time type metadata is associated to enforce its correct usage across schemes). So at this tech’s peak, the LLMs probably won’t be outputting their code in directly Python. I don’t mean that this is the peak for generative models or ML field as a whole, but for the current state of the tech and the approaches it uses.

Before the tech tops out, however, I think there will be a security issue at scale, followed by an increased focus on security of agents and the the inferred code. Since many products will be using the same models to generate code, the same flawed security patterns will arise in many places, and it will be “easy” to exploit them at scale. Even with detailed instructions, SOTA models still generate vulnerabilities. Even though most of the code is fine, it takes one small issue in a sensitive place to compromise the system - and if you write any non-trivial code with LLMs, you will run into them. I’ve encountered a lot of this issues myself, and in the code that I’ve reviewed from other developers who wrote their code with LLMs. Proper context helps a lot, but it doesn’t resolve the probabilistic nature of the output.

Regarding getting closer to human-like functionality, it will almost certainly require other ML schemes/approaches in addition to what we have now and further refining and combination of existing approaches. I think we will soon go into meta-models, where a model internally uses other models/sub models to produce the output (in its simplest form, think of a random forest that “choses” the most appropriate sub-model to run or the output which one of the sub-model’s outputs to use for the next step) - this can help mitigate some of the risks arising from the probabilistic nature of the inference. That would require coordinated, specialized agents, powered by meta-models.

Where I think we have a lot to still to gain with the current tech, even if its progress freezes, is education. LLMs provide a novel way to interact with digital information, you can do it in the same way that you would interact with another human - via spoken language. Being able to formulate your very specific questions, in your very specific way and usually getting a correct answer to it still amazes me to this day. If you combine generative models with VR, you get a whole new dimension of experiencing information, allowing to learn more effectively.

Don't Be Fooled By Backtest Performance

hello@illya.sh (Illya Gerasymchuk) — Sat, 07 Feb 2026 19:12:58 +0000

Don't Be Fooled By Backtest Performance

I've been coming accross of posts on X from accounts showcasing 70%+ returns when backtesting their vibe-coded trading strategies. Don't be misguidaded by those numbers and claims.

Most likely it performs well on historical data, but is random at best with new data.Agents are not that good at developing profitable trading strategies, as they tend to stick 'default' statistical measures like RSI and hope for the best 😄 If it was that easy - everyone would do it, thus erasing any alpha

These vibe-coded models most likely overfitting

AGI Is Perpetually 6-12 Months Away

hello@illya.sh (Illya Gerasymchuk) — Sun, 08 Feb 2026 17:09:35 +0000

AGI Is Perpetually 6-12 Months Away

Anthropic's CEO warned that software engineers will be obsolete in the next 12 months. But then again, he said the same thing about a year ago 😂

It seems that AI is perpetually 6-12 months away from replacing software engineers.

I don't think that people who spread these claims actually understand how much of a gap AI needs to close for this to happen.

It certainly won't happen in the next year.

It’s literally impossible to compete with calculators

hello@illya.sh (Illya Gerasymchuk) — Sun, 08 Feb 2026 17:36:58 +0000

It’s literally impossible to compete with calculators

- it doesn’t need breaks or sleep or weekends
- it costs sub minimum wage an hour

It’s hard to make the case to hire quants anymore.

The thing I don’t get is why all the financial companies are hiring so many quants still?

(or you can use an an analogy with autopilot and human pilots to answer this question 😄)

As I've explained in my prior posts: the commodities rally isn't over

hello@illya.sh (Illya Gerasymchuk) — Sun, 08 Feb 2026 23:58:18 +0000

As I've explained in my prior posts: the commodities rally isn't over

Gold is back above $5000
Silver is back above $80
Copper is back above $6

Prices below the above remain a buying opportunity

Enjoy!

Scarcity Doesn't Make Bitcoin Better Than Gold

hello@illya.sh (Illya Gerasymchuk) — Mon, 09 Feb 2026 12:55:11 +0000

Scarcity Doesn't Make Bitcoin Better Than Gold

Just because something is more scarce, doesn't mean it's more valuable. The number of existing Picasso paintings is much more scarce than Bitcoin - and that number won't increase.

Would you rather have all of Picasso's paintings or all of the Bitcoin? Or maybe that's a bad example. If you own all of the Bitcoin, it's a big question what will the other market participants value it at -- definitely much below the current prices though.

There's a lot more than you can do with gold than with Bitcoin. In fact, the nodes supporting Bitcoin network use gold in their connectors. Not to mention that you can take down Bitcoin, but you can't take down gold (just cut electricity and/or node subnets).

Moreover, saying that gold is "infinite" is wrong technically and practically. There is a big distinction in the amount of gold existent in the universe and Planet Earth, and the amount of gold that's economically viable to obtain.

If your argument on why Bitcoin is better than gold relies heavily on the scarcity aspect - it's probably a weak argument.

CHF Is Attractive Even At Negative Yield

hello@illya.sh (Illya Gerasymchuk) — Mon, 09 Feb 2026 16:21:40 +0000

CHF Is Attractive Even At Negative Yield

For those who wonder why it makes sense to hold Swiss Frac, even in times when Swiss government bonds have a negative yield, just take a look at the chart in the image

So the yield on USDT on AAVE is below 2%. USD Money markets currently yield ≈3.5%

hello@illya.sh (Illya Gerasymchuk) — Mon, 09 Feb 2026 23:34:07 +0000

So the yield on USDT on AAVE is below 2%. USD Money markets currently yield ≈3.5%

Why would you take on much more risk on-chain for a smaller return?

You are much less likely to lose your funds in a regulated venue than on an Ethereum-based derivative.

Many underestimate the smart contract, blockchain protocol and oracle risks in Polymarket

hello@illya.sh (Illya Gerasymchuk) — Tue, 10 Feb 2026 17:56:18 +0000

Many underestimate the smart contract, blockchain protocol and oracle risks in Polymarket

Polymarket positions are always far from "risk free". This is also why liquidity on the platform is skewed with ample arbitrage opportunities.

There is no free lunch

My random-forest guided meta model factory discovered a trading strategy which profits 87773.98%…

hello@illya.sh (Illya Gerasymchuk) — Tue, 10 Feb 2026 19:04:11 +0000

My random-forest guided meta model factory discovered a trading strategy which profits 87773.98% in the past 7 years

There is definitely no overfitting here 😂

So I solved the overfitting issue, and as I suspected backtest data was leaking into the training…

hello@illya.sh (Illya Gerasymchuk) — Wed, 11 Feb 2026 15:34:33 +0000

So I solved the overfitting issue, and as I suspected backtest data was leaking into the training set

In 13 trading days it yields ≈12% with gold on an hourly timeframe target. For silver it goes up to ≈30% (expectedly)

I'm going to add 15m, 5m and 1m data to see how it performs during the drawdown

My trading ML factory yielded ≈22% return on gold on a daily timeframe, which is almost a double…

hello@illya.sh (Illya Gerasymchuk) — Wed, 11 Feb 2026 17:46:44 +0000

My trading ML factory yielded ≈22% return on gold on a daily timeframe, which is almost a double of gold's return in the same time period (≈12%)

This was after running in on price data of gold futures most recent drawdown from ≈$5600. The model yielded its largest returns by longing the pullbacks during the correction and closing the positions at the right time (the exit logic is based on deviations from price returns). This is very interesting, as it could be an indication of model's utility during drawdowns. Its largest loss was also during the same event frame, but I believe that can be greatly optimized with model parameters and thresholds (which I haven’t optimized at all yet).

The entry/exit times are imprecise, because the strategy is based on volume dollar bars sampling, which I'm extracting/approximating from OCHLV data from TradingView.

Entry/exit decisions are driven by a random forest, which learns from the signals of various "experts”, and a tripple-barrier outcome of those signals. In practice, the experts are just Python functions which perform statistical analysis on the dollar volume feature matrix containing combined price history from various timeframes, and output a buy(1), sell(-1) or do nothing(0) signal. Then, the buy and sell signals from experts are passed to a random forest in a matrix, which then “learns” which combination of expert calls yields the most correct returns. The experts only produce position entry signals, each position is then closed based on standard deviation of price returns (intuitively: the position is closed when the price exhibits an “unusual” perceptual move, either up or down).

This trading ML factory was designed to work under significant constraints of historical price data. I limited it to the one available for export in TradingView. For example, 1 hour candle data only goes back a little over 2 years. In principle, there is little alpha to be extracted from here, but I was able to mitigate it by following a “hybrid spine” approach, where multiple timeframes are combined statistically and made available in the matrix passed to the random forest. More granular OCHLV data is scarce (e.g. the 1 minute OCHLV data that I have available for gold futures, goes back less than a month, and there are some continuity gaps in it), however it is still useful to provide some micromarket structure int terms of volume that the random forest can rely on. As such, the factory performs best on higher timeframes (4h and above).

The ML factory learns and predicts based on the prices of multiple assets (and the ratios between them). At the moment, it computes our to gold, silver and copper futures OCHLV data. But it’s designed to be dynamically extendable by adding CSVs with new asset price data.

Currently, I’m very much at the prototyping/exploratory phase with this project, so I don’t have the code publicly available yet. If you want access to the code, just reach out to me. I’m not claiming in any way that it will consistently yield >20% returns, and I understand that the trade count, trading data set granularity and backtesting timeframe are not sufficient for a strong statistical confidence in evaluating the quality of the model factory, but I am claiming that it provides a starting point for directing the factory’s approach. Also, trading costs, slippage, position sizing are not accounted for. Even with limited historical data, I believe that a careful selection of experts can yield profitable automated strategies.

Okay I found another source of overfitting/data leakage in my trading ML factory 😁

hello@illya.sh (Illya Gerasymchuk) — Wed, 11 Feb 2026 18:32:21 +0000

Okay I found another source of overfitting/data leakage in my trading ML factory 😁

The triple barrier label is computed at *position close time*, which is determined by which deviation from price returns hits first (upper bound, lower bound or timeout). The training set was including everything until a specific date, *BUT* many positions before that date close in the future - after the training cutoff date. I only got a few confirmed leaks from my run - but still overfitting.

These series of posts I’ve been making, provide you with a small practical glance into why mere backtest performance is not an indication of absolutely NOTHING. This is also what essentially goes into constructing an automated, machine-learning driven trading strategy (or rather a factory for those!). It’s very easy to overfit.

There are many large-following accounts on X/Twitter that post about the strategies that they discovered, with impressive performance on historical data. Usually those same accounts have ulterior motives, such as selling courses or access to trading signal groups. Be aware that their backtest results are NOT an indication that their strategy will work in a real-world scenario. As a general rule, if those pay-to-access strategies really performed that well with novel price data - the individuals running those strategies would be much better off operating on a fee-basis (i.e. they charge a percentage of returns on your capital, rather than a fixed fee.

📖 Quoted from 2026-02-11 17:46
https://illya.sh/thoughts/my-trading-ml-factory-yielded-22-return-on-gold-on-a-daily
My trading ML factory yielded ≈22% return on gold on a daily timeframe, which is almost a double of gold's return in the same time period (≈12%)

This was after running in on price data of gold futures most recent drawdown from ≈$5600. The model yielded its largest returns by longing the pullbacks during the correction and closing the positions at the right time (the exit logic is based on deviations from price returns). This is very interesting, as it could be an indication of model's utility during drawdowns. Its largest loss was also during the same event frame, but I believe that can be greatly optimized with model parameters and thresholds (which I haven’t optimized at all yet).

The entry/exit times are imprecise, because the strategy is based on volume dollar bars sampling, which I'm extracting/approximating from OCHLV data from TradingView.

Entry/exit decisions are driven by a random forest, which learns from the signals of various "experts”, and a tripple-barrier outcome of those signals. In practice, the experts are just Python functions which perform statistical analysis on the dollar volume feature matrix containing combined price history from various timeframes, and output a buy(1), sell(-1) or do nothing(0) signal. Then, the buy and sell signals from experts are passed to a random forest in a matrix, which then “learns” which combination of expert calls yields the most correct returns. The experts only produce position entry signals, each position is then closed based on standard deviation of price returns (intuitively: the position is closed when the price exhibits an “unusual” perceptual move, either up or down).

This trading ML factory was designed to work under significant constraints of historical price data. I limited it to the one available for export in TradingView. For example, 1 hour candle data only goes back a little over 2 years. In principle, there is little alpha to be extracted from here, but I was able to mitigate it by following a “hybrid spine” approach, where multiple timeframes are combined statistically and made available in the matrix passed to the random forest. More granular OCHLV data is scarce (e.g. the 1 minute OCHLV data that I have available for gold futures, goes back less than a month, and there are some continuity gaps in it), however it is still useful to provide some micromarket structure int terms of volume that the random forest can rely on. As such, the factory performs best on higher timeframes (4h and above).

The ML factory learns and predicts based on the prices of multiple assets (and the ratios between them). At the moment, it computes our to gold, silver and copper futures OCHLV data. But it’s designed to be dynamically extendable by adding CSVs with new asset price data.

Currently, I’m very much at the prototyping/exploratory phase with this project, so I don’t have the code publicly available yet. If you want access to the code, just reach out to me. I’m not claiming in any way that it will consistently yield >20% returns, and I understand that the trade count, trading data set granularity and backtesting timeframe are not sufficient for a strong statistical confidence in evaluating the quality of the model factory, but I am claiming that it provides a starting point for directing the factory’s approach. Also, trading costs, slippage, position sizing are not accounted for. Even with limited historical data, I believe that a careful selection of experts can yield profitable automated strategies.

Why would anyone take US job number reports seriously at this point is beyond me

hello@illya.sh (Illya Gerasymchuk) — Thu, 12 Feb 2026 15:07:40 +0000

Why would anyone take US job number reports seriously at this point is beyond me

They keep getting revised down. Those who celebrate when new job numbers are above expectations, are the same who remain quiet once they get revised down

The cycle is as follows:

1. Release numbers surpassing expectations
2. Coordinated celebration in praising the US economy and current administration
3. Numbers get revised down
4. *crickets*

At this point you should be used to this playbook.

Fact-Check: Russia Moving Back To USD?

hello@illya.sh (Illya Gerasymchuk) — Thu, 12 Feb 2026 17:10:57 +0000

Fact-Check: Russia Moving Back To USD?

Today, financial news sources are flooded with information claiming that Russia is planning a return to the US dollar, as a part of wider strategic-economic partnership with Trump, but it is true?

Reportedly, Russia’s move back to USD comes packaged with other economic cooperation points, mostly around commodities (fossil fuels in particular). This is what mainstream financial media like Bloomberg, Reuters and accounts with millions followers on X have been spreading viciously today, many of which frame this as the end of BRICS and/or the successful policies of the Trump administration.

What bothered me, is that none of them seem to clearly outline the source, mostly citing it as “Bloomberg reports”. This brings the obvious question: what sources did Bloomberg use in making this report? Well, reports regarding “Russia returning to USD settlement system” arise from an "internal Kremlin memo" that Bloomberg supposedly had access to. No further information is provided regarding the nature of this memo. No Russian state sources confirmed this information. It’s also not clear why Russia would seemingly sidestep their main strategic partner - China with this move (especially for those claiming the end of BRICS). So we are in a situation where Bloomberg claims they’ve seen X, and X gets spread as a fact, based on the claim by Bloomberg.

Major news sources are reposting this memo and framing it as Russias’s return to USD without stepping back to analyze it critically. Why would Russia, which gradually moved away from USD throughout the last 20 years, would suddenly reverse their policy to accept USD as the preferred medium of settlement? Would Russia trade in USD again — of course, I don’t believe they ever refused that.

Eventually, I fully expect Russia to be reintegrated back into international trade, and that includes trading in USD. I’ve written about that many times. What I do not expect is the Central Bank of Russia to dramatically increase USD instruments in their FX reserves. They were already sanctioned once, and that will remain a perpetual risk. Russia has successfully moved away from the U.S. Dollar, by replacing it with gold and renminbi, and they don’t have a serious dependency on US trade. If you think that you will have American companies owning Russian fossil fuel production in the near future you are mistaken.

So my take on this: claims of Russia’s return to USD settlement are overblown. This looks more like a coordinated campaign than something with real substance.

It's not about whether you have a use for the land you own, it's about whether someone else has or…

hello@illya.sh (Illya Gerasymchuk) — Thu, 12 Feb 2026 18:47:43 +0000

It's not about whether you have a use for the land you own, it's about whether someone else has or will

By owning land, at the very least, you are holding this asset for someone else's future use, and you get compensated for that service.

Land ownership comes with a set of requirements and obligations: taxes, legal work, liquidity, etc. A future buyer would be paying for those costs directly and indirectly.

Overfitting In Machine Learning Models Visualized

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Feb 2026 13:44:06 +0000

Overfitting In Machine Learning Models Visualized

I came across the visualization of 3 functions which demonstrate how a model can become overfit to noise.

So we are trying to estimate the function whose graph visualization is shown in figure A. In A you see the true underlying function representation. Figures B and C are estimates for the true function shown in Figure A. In Figures B and C, a thin-plate spline fit is used to approximate the function shown in A. To obtain the function/model in Figure C, a smaller level of smoothness was used than in Figure B (less smoothing means more flexibility/effective degrees of freedom).

Figure B approximates the function pretty well, while Figure C fits the training data *perfectly*, with ZERO errors on the training data (in figure C you can see that all of the red points are on the yellow surface). However, you notice that the surface in figure C is a lot more variable/wiggly than in figure A - this is because in the process of constructing the function model in Figure C - we overfit on the noise in the training set!

So by overfitting you are making your model extremely sensitive/adapted to the training data, and the model ends up learning from the noise instead of actual signals. Regarding a machine-learning approach to trading/finance - this is how you get >90% success rate while backtesting your model, but around random performance with novel real-world price data.

You have to remember than beyond trivial use-cases, your models are never going to be perfect — and if they are, you are probably overfitting. You have to remember that any ML model that you construct *NEVER* perfect, due to the presence of irreducible errors, bias and variance.

One idea for vibe-coding profitable trading strategies is to strictly define a pipeline of your ML…

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Feb 2026 14:55:22 +0000

One idea for vibe-coding profitable trading strategies is to strictly define a pipeline of your ML strategy factory, and restrict your AI agent to only write code within your tightly-defined framework.

I'm currently exploring this. To add a new signal, the agent will need to extend this contract.

Central Bank of Russia Denies Return to USD Payments

hello@illya.sh (Illya Gerasymchuk) — Fri, 13 Feb 2026 19:21:29 +0000

Central Bank of Russia Denies Return to USD Payments

Just like I argued yesterday, claims by Bloomberg and other financial media suggesting that Russia is to return to USD settlement were misguided/wrong.

Not only those claims lacked factual basis, but also didn't make sense in terms of a macro picture.

Remember: just because a large-following news source claims something, it doesn't make it true. And do not discount for the existence of coordinated campaigns with ulterior motives. It doesn't have to be necessarily market manipulation -- just the engagement on its own can be a strong motivator.

How USA Profited 70% On Gold In 1 Year

hello@illya.sh (Illya Gerasymchuk) — Sat, 14 Feb 2026 16:49:05 +0000

How USA Profited 70% On Gold In 1 Year

In 1933, the U.S. government purchased gold at $20.67/oz. In 1934, gold was valued at $35/oz, or ≈70% higher!

How did they do it? Easy:

1️⃣ Force public to liquidate gold at $20.67/oz
2️⃣ Raise the official gold price to $35/oz
3️⃣ Instant 70% profit 😄

Had the United States citizens not surrendered their gold in 1933 (which would be illegal to do!), they would be 70% richer just a year later. Instead, that wealth was forcefully transferred to the government, and the people who surrendered their gold became 40% poorer just a year later.

In 1934, the U.S. government had to legally raise the price of gold to make a ≈70% profit on it in…

hello@illya.sh (Illya Gerasymchuk) — Sat, 14 Feb 2026 17:17:01 +0000

In 1934, the U.S. government had to legally raise the price of gold to make a ≈70% profit on it in ≈1 year

Today, gold goes up by more than 70%/year just by market forces 😄

I've been spamming you to buy gold since it was ≈$1800/oz

China Also Banned Gold & Silver In 1983

hello@illya.sh (Illya Gerasymchuk) — Sat, 14 Feb 2026 17:29:26 +0000

China Also Banned Gold & Silver In 1983

But unlike in 1933 in the U.S., there was no global ban on the public owning gold & silver. The public was however not allowed to use it as money, collateral, lend it or trade it. Everything gold/silver related had to go through PBoC.

I'll cover this in more detail in a future post.

My wife and I met the charging bull himself

hello@illya.sh (Illya Gerasymchuk) — Sun, 15 Feb 2026 15:03:19 +0000

My wife and I met the charging bull himself

He confirmed that he's heading towards commodities

Gold Outperformed Bitcoin In The Last 8 Years

hello@illya.sh (Illya Gerasymchuk) — Sun, 15 Feb 2026 17:03:28 +0000

Gold Outperformed Bitcoin In The Last 8 Years

Let's go back in time. It's December 2017. You have $1000 to invest, and you have 2 options: gold or Bitcoin. Which one would you choose?

If you bought $1000 worth of BTC at ≈$20K/BTC in December 2017, you'd now have ≈$3500, or roughly a $2500 net profit.

If you instead bought $1000 worth of gold at ≈$1260/oz, you'd now have ≈$4000, or roughly $3000 net profit.

And throughout those 8 years of holding, gold's price never crashed by ≈50%, like it's more or less the norm with Bitcoin & rest of the crypto.

Bitcoin can be a great idea for your portfolio, but if you're so determined to HODL long-term, you may be much better off with gold.

China Banned Gold & Silver As Money In 1983

hello@illya.sh (Illya Gerasymchuk) — Mon, 16 Feb 2026 11:25:50 +0000

China Banned Gold & Silver As Money In 1983

While it remained legal to hold gold as an individual in PRC, you couldn't:
- Use gold/silver as money (unit of account/pricing)
- Trade gold/silver privately (you could only sell it to PBoC)
- Lend or pledge (use as collateral) gold/silver
- Act as a dealer of gold, unless authorized by PBoC

So effectively, as an individual in PRC, you could only sell your gold & silver through the PBoC system, but it was fully lawful to own those metals. Only if you violated the rules above, authorities could force you to liquidate your gold to PBoC at a discount over the spot price.

This is a big contrast with the gold ban in the United States via Executive Order 6102 in 1933, which required all persons to surrender/liquidate their gold coins, bullion and certificates to the state. Moreover, in 1933 the U.S. government credited you $20.67 per oz gold that you surrender. About a year later, the same government that forced people to liquidate their gold at $20.67, proceeded to raise the price of gold to $35 per oz (at that time the price of the gold was fixed by the government, not determined by market price action like today). So the U.S. government made an instant ≈70% profit on the public's gold.

The random forest that guides my model factory needs refactoring

hello@illya.sh (Illya Gerasymchuk) — Mon, 16 Feb 2026 15:03:02 +0000

The random forest that guides my model factory needs refactoring

While the current architecture shows good prospects for generating profitable trading models, the random forest is currently a bit of a mess 😅 If you look at the image attached to the post, you can see why.

Since the random forest can’t extrapolate, features like the date and source segment will just make the forest learn on noise (it will train on association between those features, e.g. it’s not very useful to learn that volume in 2025 was higher than in 2024). But this was expected. The goal was to validate an architectural approach that could work. Now it’s time for optimizations and changes. Actually, changes before optimizations.

Another thing that I’ll get rid of is the hybrid spine for supporting data from multiple timeframes, as the model didn’t extract any meaningful alpha — and some of it has even confused the random forest. I’m sure there is way to make even with limited data, but I’ll be moving to testing it on dataset for which I have access to highly granular data (hello, Bitcoin!). So the logic of the data loader in the pipeline will be greatly simplified.

I’ll also make the labeler configurable, so that you can use the same set of features for different types of predictions. For example, you could have the “unconstrained” standard deviation labelling in the sense hat you can enter and exit the position at any time, to constrained logic scenarios such as the ones of Polymarket’s 5-minute price predictions on Bitcoin, where you can only enter a position at specific times, and the resolution happens at specific times (e.g. at the end of every 5th minute of the day, starting from 0).

The core logic of the ML pipeline remans the same.

They say that AI agents will replace all white collar-jobs in the next 6-12 months 😄

hello@illya.sh (Illya Gerasymchuk) — Tue, 17 Feb 2026 13:35:07 +0000

They say that AI agents will replace all white collar-jobs in the next 6-12 months 😄

So LLMs only have 5-11 months to learn about car washing.

This simple prompt breaks ChatGPT, DeepSeek, Qwen and Kimi. Works on Gemini though.

My ML model factory produced this amazing model that trades Bitcoin on 5-minute intervals, cut off…

hello@illya.sh (Illya Gerasymchuk) — Tue, 17 Feb 2026 14:57:38 +0000

My ML model factory produced this amazing model that trades Bitcoin on 5-minute intervals, cut off at each 5th minute (very similar to Polymarket's 5 minute BTC markets) and it made over 200K trades in ≈7 months

Stats:
- 200K trades
- 6.69% profit
- 49% win rate

So I've pretty much discovered a coin flip 🤣

My random forest looks much better after the clean-up

hello@illya.sh (Illya Gerasymchuk) — Tue, 17 Feb 2026 15:01:07 +0000

My random forest looks much better after the clean-up

The feature matrix has been refactored to only include features from which the random forest will be able to learn more effectively. This should greatly reduce the noise

Now, it's time to optimize signals 😄

Currently, this is the most valued expert in my model factory pipeline

hello@illya.sh (Illya Gerasymchuk) — Tue, 17 Feb 2026 16:33:29 +0000

Currently, this is the most valued expert in my model factory pipeline

Not because it does anything useful, but precisely because it does not

The expert randomly emits positive(buy) or negative(sell) signals. This is a rough baseline for random behaviour. Very useful for the integration testing of the pipeline and identifying noise

Expert optimization is going well, and I'm starting to move towards the alpha in 5-minute Bitcoin…

hello@illya.sh (Illya Gerasymchuk) — Tue, 17 Feb 2026 17:12:07 +0000

Expert optimization is going well, and I'm starting to move towards the alpha in 5-minute Bitcoin price markets

I'm not claiming that the model that I currently have is meaningful (it's NOT!), but it's getting closer to interesting win rate ratios (>55%)

If you invested just $100 in Gold in 4000 BCE, today it would be worth $100

hello@illya.sh (Illya Gerasymchuk) — Wed, 18 Feb 2026 01:40:19 +0000

If you invested just $100 in Gold in 4000 BCE, today it would be worth $100

This is because USD didn't exist 6000 years ago, so it wouldn't be accepted as means of settlement in Ancient Egypt, thus you wouldn't find a counterparty willing to sell you gold in exchange for US currency.

6000 years is also for how long gold has been used as money. Yet, some still believe that Bitcoin is the new gold and that it will replace gold as money 😄

After tweaking the existing set of base learner models, the random-forest driven trading model…

hello@illya.sh (Illya Gerasymchuk) — Wed, 18 Feb 2026 14:30:10 +0000

After tweaking the existing set of base learner models, the random-forest driven trading model factory continues to improve

The win rate for predicting Bitcoin's 5-minute price moves (binary) is now approaching 54%. A win rate of ≈56% should suffice to accommodate for transaction costs. Win rates over 60% is where it starts to get interesting.

Primary Dealers Failures To Settle Implications For Risk Assets

hello@illya.sh (Illya Gerasymchuk) — Wed, 18 Feb 2026 14:40:00 +0000

Primary Dealers Failures To Settle Implications For Risk Assets

Security settlement failures on the dealer side are a signal of liquidity stress. In short, it signals that either collateral (securities) or USD liquidity are short. Generally, this is bearish for risk assets.

Dealers exercise a key liquidity role in the financial markets microstructure, so a significant stress on their operations will propagate throughout the market.

You can anecdotally visualize this correlation in Bitcoin by noticing that the peaks of failures to receive/deliver by dealers coincide with at least short-term tops for Bitcoin prices.

This weekly set of data is made freely available by Office of Financial Research (OFR), and you can download it CSV or JSON formats. If you are incorporating this data into your machine-learning trading models, beware of the look-ahead bias, as this OFR data is released with about a week of delay.

Proxy Model From Polymarket's 15 Minute Bitcoin Price

hello@illya.sh (Illya Gerasymchuk) — Wed, 18 Feb 2026 16:06:22 +0000

Proxy Model From Polymarket's 15 Minute Bitcoin Price

I found historical datasets for Polymarket's 15 minute up or down Bitcoin price and I think I can use this data to obtain useful signals via a proxy model. I'll start with linear regression to build a prediction model, to see if this transfer learning approach works here.

Yes, it will be overfitting, but for this signal generator it would be by design. The end goal is to find features that improve the random forest's split rules, thus further improving the win rate.

Vibe-Coding Vulnerabilities With Claude Code

hello@illya.sh (Illya Gerasymchuk) — Wed, 18 Feb 2026 16:19:50 +0000

Vibe-Coding Vulnerabilities With Claude Code

A decade ago there was a joke that IoT stands for "Internet of Vulnerabilities", given how vulnerable many Internet of Things devices were and how easy it was to exploit them.

I think we will enter an even bigger era of vulnerabilities with vibe-coded systems, especially with agents handling everything from feature development to deployment. You are outsourcing the security of your product/application to a probabilistic mathematical model, which hallucinates by design.

For a sufficiently complex system, it's not a question of IF but of WHEN the LLM will make a security-compromising mistake. Unfortunately, large customer data leaks may become the norm.

If you care about the secrecy of your data, I would advise you be very wary of products developed in such manner. Of course, for many use cases you may also not care about this, and prioritize lower cost or specific features. But you must be aware of the risks.

You are essentially one prompt away from compromising your system and its data. We will probably even have new laws/regulations coming out to address this.

This a gross oversimplification of what it takes to replicate the human brain with AI

hello@illya.sh (Illya Gerasymchuk) — Thu, 19 Feb 2026 12:31:36 +0000

This a gross oversimplification of what it takes to replicate the human brain with AI

The post is assuming we have a model that can accurately replicate the human brain, which we don't.

200T parameter models won't solve that -- you'll still have a high model bias.

Added a connection to Binance's futures API and now I have the base learners and the random forest…

hello@illya.sh (Illya Gerasymchuk) — Thu, 19 Feb 2026 13:52:59 +0000

Added a connection to Binance's futures API and now I have the base learners and the random forest looking for profitable 5-minute Bitcoin trades in real time

Let's see how it goes, the model already entered its first trade. Let's see how it goes 😄

The model's first live data trade was a successful Bitcoin short! The position was open for 4…

hello@illya.sh (Illya Gerasymchuk) — Thu, 19 Feb 2026 13:56:27 +0000

The model's first live data trade was a successful Bitcoin short! The position was open for 4 minutes, for a 0.11% return

The time to optimize hyperparameters of the random forest has come

hello@illya.sh (Illya Gerasymchuk) — Thu, 19 Feb 2026 16:04:34 +0000

The time to optimize hyperparameters of the random forest has come

Starting with a grid search approach

Out of Sample Permutation Feature Importance For Random Forest’s Feature Optimization

hello@illya.sh (Illya Gerasymchuk) — Fri, 20 Feb 2026 15:08:42 +0000

Out of Sample Permutation Feature Importance For Random Forest’s Feature Optimization

After the first level of tuning of the random forest’s parameters, it came time to optimize the features on which the random forest gets trained on. I’ve already did a minor cleanup, but I didn’t yet test for the predictive importance of each feature in the random forest.

To optimize the random forest’s features, I’m using Out of Sample Permutation Feature Importance (OOS). The OOS approach consists in three core steps:

1️⃣ Train the random forest once on the training data
2️⃣ Take out-of-sample validation data (testing data), permute the values of a single feature/values within the same column and pass them to the model trained in step 1.
3️⃣ A feature is important for the model if the model’s predictive power reduces significantly when that feature’s values are randomly shuffled.

The “out of sample” part refers to the fact that the set of data used to train the model and evaluate it after permutations is distinct, thus reducing the contribution of noise to the evaluation metrics. By default, scikit-learn uses Gini Importance to rank features by their utility to the model. Gini is a bad metric for my data because of:

➖ High cardinality bias (it has an inherent bias towards continuous variables, and some of my features are discrete)
➖ Gini importance is computed on the training data
➖ In case of two correlated features, the random forest will randomly pick one at each split, but Gini will actually divide the importance between the two

Additionally, the out-of-sample Area Under the ROC Curve (AUC) of 0.7566 is unrealistically good for predicting 5-minute Bitcoin price moves. This value implies that if you pick a random 5-minute winning window and a 5-minute losing one, my model ranks the winner window ≈76% of the time. Either I found a model that beats virtually every financial institution in existence, or there is a lookahead bias and overfitting happening in the model.

Conclusion: my meta forest — the “seconds_to_settle” feature is basically carrying the entire model 😂 So in its current state, the random forest is training almost entirely on the time of day/time to expiration. The cleanup has started.

As a result of the first step in optimizing/prioritizing the random forest’s features -- I've…

hello@illya.sh (Illya Gerasymchuk) — Fri, 20 Feb 2026 15:26:09 +0000

As a result of the first step in optimizing/prioritizing the random forest’s features -- I've dropped about half of them 😁

📖 Quoted from 2026-02-20 15:08
https://illya.sh/thoughts/out-of-sample-permutation-feature-importance-for-random
Out of Sample Permutation Feature Importance For Random Forest’s Feature Optimization

After the first level of tuning of the random forest’s parameters, it came time to optimize the features on which the random forest gets trained on. I’ve already did a minor cleanup, but I didn’t yet test for the predictive importance of each feature in the random forest.

To optimize the random forest’s features, I’m using Out of Sample Permutation Feature Importance (OOS). The OOS approach consists in three core steps:

1️⃣ Train the random forest once on the training data
2️⃣ Take out-of-sample validation data (testing data), permute the values of a single feature/values within the same column and pass them to the model trained in step 1.
3️⃣ A feature is important for the model if the model’s predictive power reduces significantly when that feature’s values are randomly shuffled.

The “out of sample” part refers to the fact that the set of data used to train the model and evaluate it after permutations is distinct, thus reducing the contribution of noise to the evaluation metrics. By default, scikit-learn uses Gini Importance to rank features by their utility to the model. Gini is a bad metric for my data because of:

➖ High cardinality bias (it has an inherent bias towards continuous variables, and some of my features are discrete)
➖ Gini importance is computed on the training data
➖ In case of two correlated features, the random forest will randomly pick one at each split, but Gini will actually divide the importance between the two

Additionally, the out-of-sample Area Under the ROC Curve (AUC) of 0.7566 is unrealistically good for predicting 5-minute Bitcoin price moves. This value implies that if you pick a random 5-minute winning window and a 5-minute losing one, my model ranks the winner window ≈76% of the time. Either I found a model that beats virtually every financial institution in existence, or there is a lookahead bias and overfitting happening in the model.

Conclusion: my meta forest — the “seconds_to_settle” feature is basically carrying the entire model 😂 So in its current state, the random forest is training almost entirely on the time of day/time to expiration. The cleanup has started.

The random forest's features have been heavily refactored. I also replaced the polymarket feature…

hello@illya.sh (Illya Gerasymchuk) — Fri, 20 Feb 2026 16:51:38 +0000

The random forest's features have been heavily refactored. I also replaced the polymarket feature with lookahead bias (the proxy model) with a combination of other indicators.

📖 Quoted from 2026-02-20 15:26
https://illya.sh/thoughts/as-a-result-of-the-first-step-in-optimizing-prioritizing-the
As a result of the first step in optimizing/prioritizing the random forest’s features -- I've dropped about half of them 😁

I'll be using PAXG prices as a proxy for gold prices. The great thing about PAXG is that Binance…

hello@illya.sh (Illya Gerasymchuk) — Fri, 20 Feb 2026 18:03:33 +0000

I'll be using PAXG prices as a proxy for gold prices. The great thing about PAXG is that Binance provides for historical 1-minute OCHLV data dating back more than 5 years

My plan is to use this data to derive more signals and/or features for the meta forest

A script is in the process of downloading and preparing the data 😄

crypto is not cryptocurrency

hello@illya.sh (Illya Gerasymchuk) — Sat, 21 Feb 2026 20:23:56 +0000

crypto is not cryptocurrency

The model factory has been refactored to use a DSL for configuring the pipeline -- so now you can…

hello@illya.sh (Illya Gerasymchuk) — Tue, 24 Feb 2026 12:55:39 +0000

The model factory has been refactored to use a DSL for configuring the pipeline -- so now you can visualize and configure the whole flow from a single place

This also makes it easier for agents to autonomously discover and verify profitable trading strategies, but I'll cover that in more detail in another post 😁

📖 Quoted from 2026-02-20 16:51
https://illya.sh/thoughts/the-random-forests-features-have-been-heavily-refactored-i
The random forest's features have been heavily refactored. I also replaced the polymarket feature with lookahead bias (the proxy model) with a combination of other indicators.

I've been running live a tuned model designed to predict Bitcoin's price moves in Polymarket's…

hello@illya.sh (Illya Gerasymchuk) — Tue, 24 Feb 2026 13:10:34 +0000

I've been running live a tuned model designed to predict Bitcoin's price moves in Polymarket's BTC's 5 minute up or down markets

Backtests had a quite remarkable perfomance, with PnL over 70% across >500 trades

As expected, real world performance is not as impressive, but it's managing to be slightly profitable 😁 LOB data integration should improve the model's accuracy further.

Using Neural Networks To Find Imbalances In Limit Order Books

hello@illya.sh (Illya Gerasymchuk) — Fri, 27 Feb 2026 12:29:38 +0000

Using Neural Networks To Find Imbalances In Limit Order Books

I've been working on model factory that predicts short-term asset movements. The model focuses on predicting whether the price of an asset at a future time T+c will be below or above the current asset's price at time T. c is an arbitrary constant which in my model represents the number of minutes.

Currently, it's structured to match Polymarket's 5 minute BTC up or down markets, so this model can be used for trading on those markets. In this setup, the return is binary -- you either almost double or lose the whole position (assuming an entry as within a small delta of the market open). But this model can also be easily adapted to long/short futures positions with more flexibility on entry or exit times — it would require adapting the labeler and the backtest configuration (namely the cost model and position sizing).

The first version of the model factory relied on features derived from 1 minute OCHLV data for Bitcoin. I focused on setting up a multi-model pipeline, and generalize it into a configurable DSL-like experience. I also focused on avoiding a big part of overfitting/looking forward and doing the first level of parameter optimization. I was able to obtain a small edge (≈0.54 win rate), and short-run live tests showed the model to be profitable, however I’m not very sure how resilient it is to regime changes, nor I find the computed edge sufficient (the win rate is subject to the error from the models). I also wasn’t expecting to achieve a meaningful edge with just OCHLV data, so I’m integrating limit order book (LOB) data in order to extract price movement predictive patterns from the lower level dynamics that end up determining the price.

Given that the order book drives the market price, its reasonable to assume that there is a function that expresses the relationship between the current order book state, and in which direction that state is more likely to move the price in the short-term. It’s my first time working with LOB data, so I looked for papers which explore a framework for modeling price predictions based on a multi-level LOB with price and volume data for bid and ask at each level. After filtering through several options, I settled on one titled “DeepLOB: Deep Convolutional Neural Networks for Limit Order Books” by Zihao Zhang, Stefan Zohren, and Stephen Roberts. I liked it because the authors taking care in avoiding overfitting and leaking forwarding the data, by splitting the data set into one for training, one for validation and one for testing. The model is trained on the training set, the hyperparameters are optimized on the validation set, and the verification/backtesting is done on the test set. I also wanted to integrate neural networks into the pipeline, and DeepLOB model uses a Convolutional Neural Network (CNN) and a Long Short-Term Memory (LSTM) network in its construction.

The neural networks in DeepLOB works as follows. First, the raw LOB data passes through a CNN to summarize/extract patterns from the data via filters whose weights are learned by the network. The output then goes through the inception module, which is another CNN which operates with multiple convolutional filters if different sizes to capture multiple time window patterns. Then, the resulting matrix is passed to LSTM, which is a recurrent neural network, meaning it’s able to maintain “memory” of the past state when evaluating the new state. LSTM outputs a vector, which is then multiplied by a weight matrix to produce 3 raw scores (logits), which then get mapped to probability for each one of the 3 classes via Softmax: (Up, No Change, Down), which serve as a trading signal.

I’ll be incorporating something similar as signals/experts and/or features in the existing pipeline of my model factory. I’ll also extend the pipeline to add an additional split for the validation set to optimize the hyper parameters of the random forest. I’ll upload the code to GitHub soon, but note that it’s a work in progress.

So I extended my MCP server with a tool to execute arbitrary Python code, and now that's pretty…

hello@illya.sh (Illya Gerasymchuk) — Fri, 27 Feb 2026 14:35:29 +0000

So I extended my MCP server with a tool to execute arbitrary Python code, and now that's pretty much the only tool the host agent is using 😂

Instead of reusing the other tools, the agent prefers to write the whole logic from scratch and then pass to the MCP to execute it. It worked fine, but it's using too many tokens.

Code and context limitations are in the process of being imposed.

Crude Oil Prices Continue To Increase

hello@illya.sh (Illya Gerasymchuk) — Mon, 02 Mar 2026 14:48:51 +0000

Crude Oil Prices Continue To Increase

Over the past year, I've reiterated multiple times on the fact that that oil prices will continue to increase and that they'll soon be back up above their June 2025 prices. This happened again today, with Brent Crude Oil being up more than 10% on the day.

About 8 months ago I wrote a thread explaining and predicting an increase in oil and gold prices in the near future. Since then:

➖ Brent Crude Oil went up ≈17%
➖ Gold went up ≈65%
For reference, in the same time period, S&P 500 went up ≈18%.

Worldwide oil trade was (and still is!) subject to great geopolitical risk, part of which is materializing now. In addition to that, monetary debasement continues its course and military conflicts have a tendency to exuberate it, via increased demand, sovereign debt and spending.

Despite that, many continue to believe that violating the International law by invading a sovereign nation and kidnapping their leader implies lower oil prices, just because that sovereign nation is in procession of that natural resource. Of course, the reality is much more complex due to factors such as the required level skill/proficiency, infrastructure, internal risk and the implications of current geopolitical events on the international trade.

To conclude, remember: commodities are at the base of global real economy, and there will be a demand for them almost "no matter what". Of course, not all commodities come with the same risk profile -- I will refer you to my past posts on this topic, which you can read under the "commodities" articles category on my website.

Why High Oil Prices Are Bad For USD (HINT: China & Credit)

hello@illya.sh (Illya Gerasymchuk) — Mon, 02 Mar 2026 15:48:00 +0000

Why High Oil Prices Are Bad For USD (HINT: China & Credit)

I don’t think that higher oil prices will help the value of US dollar medium to long-term this time. Higher oil prices induce higher prices for producers, which lead to higher prices for consumers. The US economy is already extremely dependent on its refinancing capacity. Currently, there are liquidity stress signs across several Fed facilities, which make that refinancing/rolling-over more difficult.

Higher oil prices, means even more new financing to cover the additional costs, which will further increase the country's refinancing burden. So this would push up not only broad & base money, but also raise their "baseline". The "baseline" will increase because the notional USD amount to refinance in the future will increase, meaning higher future liquidity needs.

In the most basic sense, this will increase the domestic supply of USD. If you consider the current slow, but steady decrease of demand for US Treasury debt instruments -- that's reduced demand for USD. Increased supply, combined with a reduced demand, implies a lower price.

The most notable instance of Treasury holding reductions (including not rolling them) is by People's Republic of China -- the world's #1 largest exporter, and China's explicit goal of increasing the share of renminbi in international settlement. Although the first country to successfully move away from USD was Russia -- and they did that by effectively swapping USD-denominated assets for gold and renminbi. If you go back in history, you will find a presidential order from the Russian Federation's president instructing the Central Bank of Russia to increase their gold tonnage holdings back in 2005. Other sovereigns are likely replicate this model, at least in part.

I believe the ECB + NCBs in the EU may also soon move towards the direction of reducing the share of USD-denominated holdings in their balance sheets as well. This situation presents as a great opportunity for increasing share of EUR usage, as it's already the 2nd most used currency, following the USD. Increased bi-lateral trade agreements with China would strengthen both, Euro and renminbi via increased demand -- and there's an intrinsic incentive to do that, as there is a lot of value that can be imported, and is already being imported, from the PRC. This would of course lead to the increase of renminbi-denominated holdings across the central banks in the EU.

Due to the above, the demand for USD is facing a downward pressure, while USD liquidity is showing signs of stress, causing an upward pressure on its supply. Higher domestic prices will only push that supply further up, while leveraging the economy even further (more risk). Sure, higher oil prices means more demand for USD to buy oil in OPEC and higher export revenue, but I don't think that would be sufficient to offset the negative implications.

I've been calling for new local heights for oil prices for over 6 months now

hello@illya.sh (Illya Gerasymchuk) — Tue, 03 Mar 2026 14:05:00 +0000

I've been calling for new local heights for oil prices for over 6 months now

Last time Brent Oil traded at $85 per barrel was in 2024

Throughout 2025 and start of 2026, some of the largest finance accounts on X where telling you to short oil. Some are still referring to these price spikes as "noise"

CUSUM Filter Visualized

hello@illya.sh (Illya Gerasymchuk) — Tue, 03 Mar 2026 14:57:14 +0000

CUSUM Filter Visualized

I’m looking into CUSUM Filters in more depth and just wanted to share this nice visualization that Gemini created to demonstrate graphically how the threshold affects the sampling/event emission for a price series.

In this example, price is used a the feature, but note that CUSUM works with any measured quantity

Very excited for the upcoming price rebound in commodity metals

hello@illya.sh (Illya Gerasymchuk) — Tue, 03 Mar 2026 15:15:56 +0000

Very excited for the upcoming price rebound in commodity metals

Current prices remain a strong buying opportunity.

Remember that silver is significantly more volatile than gold and can retrace down closer to ≈$70, but it's definitely not the top for this bullrun in metals

Random Forest Cat: An ML Trading Factory

hello@illya.sh (Illya Gerasymchuk) — Wed, 04 Mar 2026 15:12:07 +0000

Random Forest Cat: An ML Trading Factory

I open-sourced a multi-model, machine-learning based factory for trading strategies on GitHub. It's written in Python and is highly customizable, as it exposes a framework for configuring the pipeline via a DSL.

Currently, it comes with two pipeline configurations: one that focuses on predicting wether the price of Bitcoin in 5 minutes will be higher or lower than now (Polymarket style), and a more generic strategy that shorts or longs Bitcoin at its own discretion.

This project also represents an experiment on enabling AI agents to discover trading strategies that will be profitable with real world, live price data. Clone the project and try asking an LLM to generate a profitable trading strategy using the framework.

You can also just train your own model (or use mine) and use its signals for live trades. Beware that this is a work in progress. I've already integrated an explicit split for a the validation set, but that code is not pushed yet -- I'll probably do it today. More improvements are also on the way.

In either case, the current version of the code on GitHub works, so you can download and run it.

GitHub Repository Link: https://github.com/iluxonchik/random-forest-cat-ml-factory

The problem with granular historical limit order book (LOB) data is its massive size

hello@illya.sh (Illya Gerasymchuk) — Wed, 04 Mar 2026 19:04:08 +0000

The problem with granular historical limit order book (LOB) data is its massive size

I have a script downloading, decompressing and combining all of the data, and the total size was quickly over 300GB in size!

I was hoping I could prototype & train a primary model from data in CSVs, but I'm pretty sure it'll need optimizations (hello, Parquet!)

Fingerprinting and loading ≈500GB of Bitcoin L1 LOB historical data from CSVs into a single DuckDB…

hello@illya.sh (Illya Gerasymchuk) — Thu, 05 Mar 2026 14:21:41 +0000

Fingerprinting and loading ≈500GB of Bitcoin L1 LOB historical data from CSVs into a single DuckDB file database

This will take a while, but then I will be able to train neural networks on that data 😄

Using DuckDB To Train A Neural Network On 500GB Of Price Data

hello@illya.sh (Illya Gerasymchuk) — Thu, 05 Mar 2026 14:35:13 +0000

Using DuckDB To Train A Neural Network On 500GB Of Price Data

I have ≈500GB of historical Bitcoin level 1 limit order book data to process and train a neural network on.

I don't want to overcomplicate the data access layer and definitely want to keep all of the training, validation and inference in Python. A simple file-based DuckDB setup sounds like a good solution for this, as it allows for iterative in-memory data loading within the model training code -- this is because DuckDB already implements all of those nice abstractions that allow it to load large datasets lazily/on-demand. So I'll neither need 500GB of RAM, nor a dedicated DBMS process.

The model will be trained using a walk-forward strategy, so several versions of neural network weights/trained models will be generated. This means the amount of data loaded into the memory will be limited in either case. I may rely on DuckDB for some algebraic processing when querying data, but for now I'm planning to mostly filter for events within a specific time range.

I used DuckDB several times before for finance applications, but not to actively process such a large amount of data, so I will report back if something goes wrong.

2 billion+ rows (and counting!) added to the DuckDB table containing Bitcoin's L1 LOB data so far

hello@illya.sh (Illya Gerasymchuk) — Thu, 05 Mar 2026 17:21:28 +0000

2 billion+ rows (and counting!) added to the DuckDB table containing Bitcoin's L1 LOB data so far

The .duckdb file is now 32GB. This is going to be very interesting to process. If this experiment goes well -- I'll switch to DuckDB as the default storage layer for the pipeline

Who would've thought that reordering 5 billion rows in a DuckDB table would need over 300GB in…

hello@illya.sh (Illya Gerasymchuk) — Thu, 05 Mar 2026 19:19:04 +0000

Who would've thought that reordering 5 billion rows in a DuckDB table would need over 300GB in temporary storage on your hard drive

Luckily there is `SET temp_directory`, so I'm running ORDER BY again pointing it to a medium that should meet DuckDB's storage needs

I still believe my approach is feasible

Brent Crude Oil breaks above $90, and its headed higher!

hello@illya.sh (Illya Gerasymchuk) — Fri, 06 Mar 2026 14:31:04 +0000

Brent Crude Oil breaks above $90, and its headed higher!

You can add this to my list of correct predictions. Last time oil was this expensive was more than 2 years ago in 2023.

Perhaps it's obvious at this point -- but it won't top out at $90 😄

📖 Quoted from 2026-03-02 14:48
https://illya.sh/thoughts/crude-oil-prices-continue-to-increase
Crude Oil Prices Continue To Increase

Over the past year, I've reiterated multiple times on the fact that that oil prices will continue to increase and that they'll soon be back up above their June 2025 prices. This happened again today, with Brent Crude Oil being up more than 10% on the day.

About 8 months ago I wrote a thread explaining and predicting an increase in oil and gold prices in the near future. Since then:

➖ Brent Crude Oil went up ≈17%
➖ Gold went up ≈65%
For reference, in the same time period, S&P 500 went up ≈18%.

Worldwide oil trade was (and still is!) subject to great geopolitical risk, part of which is materializing now. In addition to that, monetary debasement continues its course and military conflicts have a tendency to exuberate it, via increased demand, sovereign debt and spending.

Despite that, many continue to believe that violating the International law by invading a sovereign nation and kidnapping their leader implies lower oil prices, just because that sovereign nation is in procession of that natural resource. Of course, the reality is much more complex due to factors such as the required level skill/proficiency, infrastructure, internal risk and the implications of current geopolitical events on the international trade.

To conclude, remember: commodities are at the base of global real economy, and there will be a demand for them almost "no matter what". Of course, not all commodities come with the same risk profile -- I will refer you to my past posts on this topic, which you can read under the "commodities" articles category on my website.

UPDATE: the 5 billion row table reordering in DuckDB has been in progress for almost 24 hours

hello@illya.sh (Illya Gerasymchuk) — Fri, 06 Mar 2026 15:29:15 +0000

UPDATE: the 5 billion row table reordering in DuckDB has been in progress for almost 24 hours

The temporary directory used by the DuckDB process has filled up to almost 550GB 😅

This would've been faster, but the temp storage has limited bandwidth

Reordering of a 5 billion row DuckDB table completed yesterday 🎉

hello@illya.sh (Illya Gerasymchuk) — Sun, 08 Mar 2026 14:28:47 +0000

Reordering of a 5 billion row DuckDB table completed yesterday 🎉

The whole process took less than 48 hours. Excited to integrate DuckDB as the main data abstraction layer for the neural network-based models that will be trained on the LOB data. If everything goes well -- it will become the new default.

Crue Oil: United States Acts, Russia Benefits (Once Again)

hello@illya.sh (Illya Gerasymchuk) — Sun, 08 Mar 2026 15:55:12 +0000

Crue Oil: United States Acts, Russia Benefits (Once Again)

Despite the heavy international sanctions, Russia is now selling Urals oil at a ≈$5 premium over Brent oil. Usually, Urals trades at a discount to Brent, so this is a relatively unusual situation. This is, of course, caused by the U.S. military force use against a sovereign nation once again.

While oil production and export from the Arab Gulf region has now greatly reduced, the demand for oil didn't follow that downtrend. 20% of all oil passes Straight of Hormuz, the flow through which is now heavily limited. As a result, a significant part of that demand has now shifted towards Russia, which is capitalizing on that demand by selling crude oil, not only for a higher price, but also at a premium!

High oil prices are also great news for Ruble. More than ≈50% of Russian oil exports are in foreign currencies, but exporters must pay their taxes in Rubles. As such, exporters must sell foreign currencies to purchase Ruble, which drives its price up. Additionally, since 2020 Russia has policies in place which cause high oil prices to usually lead to further accumulation of gold by the Central Bank of Russia (CBR): excess revenue from taxes resulting from oil sales above ≈59$/barrel are directed to the NWF for investing in precious metals (mostly gold) and FX (mostly renminbi/yuan). So instead of spending the extra revenue immediately, it gets invested.

The mechanism by which the FX & gold purchase happens from excess gas and oil revenues is also interesting to explore. NWF is administrated by Russia’s Ministry of Finance (MoF), and it’s effectively MoF doing those purchases on behalf of NWF. So every time revenues from oil and gas taxes exceed the benchmark price, the MoF buys foreign assets and gold from the CBR, which then immediately repurchases what it had just sold to the MoF/NWF. As a result of this sanitization mechanism, the Central Bank of Russia net holdings of gold/FX currencies remain constant, while the net asset holdings of the NWF increase — so in net terms the Russian government holds more gold and FX.

Imagine on a given period Russia recovered an extra revenue of $100M over the benchmark. Under the structure described above, the Russian government will not immediately spend those $100M, but instead invest them into gold & FX currencies. The step-by-step process looks something like this:

1. MoF buys $40M worth of gold from the CBR
2. CBR repurchases $40M worth of gold from domestic Russian market, using the proceeds from 1
3. MoF buys $60M worth of renminbi from the CBR
4. CBR repurchases $60M worth of renminbi from FX markets, using the proceeds from 2

As you can see, the combination of steps above leaves Russia with more gold and FX reserves than before.

For the month of March 2026, the Russian Federation has paused the gold/FX purchases from excess revenue from oil and gas. However, I don’t think that this pause will remain in effect much longer, as it has been explicitly linked to lowering the Ural’s oil revenue threshold from the current ≈$59 per barrel, potentially down to $45-50 per barrel. For now, all of the excess revenue from oil and gas will be going to the federal budget, available for its immediate liquidity needs.

So whichever way you look at it — Russia massively benefits from the raise in price of commodities and precious metals, namely gas, oil, gold and silver.

Going long on Bitcoin now at $68K is very risky (and maybe brave!). I would't do it

hello@illya.sh (Illya Gerasymchuk) — Sun, 08 Mar 2026 17:53:00 +0000

Going long on Bitcoin now at $68K is very risky (and maybe brave!). I would't do it

There is too much negative pressure on global liquidity, which makes downward price shocks in the near term much more likely

And once again -- global liquidity is not measured by M2, that's only a part of it.

And just like that... highest oil prices since 2022 -- just a few percent shy from the heights of…

hello@illya.sh (Illya Gerasymchuk) — Sun, 08 Mar 2026 22:33:46 +0000

And just like that... highest oil prices since 2022 -- just a few percent shy from the heights of May 2nd 2022

I have first warned about an incoming large increase in oil prices ≈8 months ago

📖 Quoted from 2026-03-06 14:31
https://illya.sh/thoughts/brent-crude-oil-breaks-above-90-and-its-headed-higher
Brent Crude Oil breaks above $90, and its headed higher!

You can add this to my list of correct predictions. Last time oil was this expensive was more than 2 years ago in 2023.

Perhaps it's obvious at this point -- but it won't top out at $90 😄

Don't Expect $60 Oil In 2026

hello@illya.sh (Illya Gerasymchuk) — Wed, 11 Mar 2026 14:28:16 +0000

Don't Expect $60 Oil In 2026

$36 billion worth of oil will be released from strategic reserves of 32 countries, in an effort suppress the oil's price down price down. However, I don't believe those efforts will be enough.

International Energy Agency (IEA) has just approved the largest oil release from its member countries strategic reserves. As an emergency measure, 400 million barrels of oil will be channelled into the markets from sovereign reserves, which is more than double of the previous record of 182 million barrels in 2022. Replacing Russian oil in 2022 was mostly a supplier problem, while Straight of Hormuz is a major route for many suppliers, making the disruption of flow through it a global logistics challenge. I consider this to be objective stress signal on the oil supply market, which acts as upwards price pressure. The market seems to agree with me, at least in the short term, given that even on these news Brent Oil is still trading around ≈$90 per barrel.

While the release of oil reserves by IEA members will exert downward pressure on the price of oil while that release lasts - there is no free lunch. Not only those reserves would need to be replenished, but it also expose the IEA countries to increased risk due to reduced domestic oil supply. This is another supply stress factor that will need to be resolved.

Geopolitical risk is perhaps the most obvious driver behind the recent oil price increase, and even in case of a de-escalation the risk will decrease to levels that are higher than at the start of 2026. The damaged oil production and logistics infrastructure will also need to be restored and other similar costs covered. As such, the geopolitical risk baseline has been elevated, and it will remain elevated at least until the end of this year.

For these reasons, it will probably take a while for the oil prices to decrease towards the ≈$60 area. To be very specific - I don't believe oil will fall down to $60 in 2026.