to "reset" the system they just need to flush out the toxic assets that are in the red. in 2007 that was mortgage backed securities. this time, it's more than just the treasury market, there is the AI bubble, with the circular money flows pumping valuations, they are surely mostly trash assets, there is intensive regime uncertainty with the totaliarianism that is spreading across the west, but especially europe, and we are in what Mises called a "crack-up boom" and such a circumstance - one of the red flags would be extremely high valuation of bitcoin, because when shit is going sideways, people chase anything and everything that might protect them from being caught in the liquidation cascade. of course, PMs will be the first canary, bitcoin and some types of equities and bonds will start to squeal (i think this is already happening) and bitcoin isn't feeling it yet, which means it's not quite at the elbow of the hockeystick.

it's coming close though, when you look at the log10 chart of gold price, it is starting to accelerate. deleveraging and securing productive assets and assets with a low rehypothecation rate is what you want. bitcoin is getting smothered by that now just as for a long time gold and especially silver were.