While everyone’s fixated on Powell, the real liquidity boom is coming out of Beijing—and almost no one is positioned for it.
In the last Fed meeting, the markets hung on every syllable. Financial pundits dissected Powell’s tone, parsing whether “restrictive” meant “pause” or “pivot.”
Meanwhile, something far more consequential was happening across the Pacific—and it barely made a ripple.
While investors obsessed over 25 basis points, China quietly became the world’s liquidity engine.
Not the Fed. Not the ECB. The People’s Bank of China (PBOC).
And if you’re still fighting the last war, monitoring every Fed whisper, you’re fighting the wrong central bank.
For years, China was a drag on global money supply. It tightened credit, drained liquidity, and reined in speculation. But that era is over.
The People’s Bank of China
has flipped the switch,
unleashing its biggest
monetary easing cycle since
2020 and driving global M1
growth higher than any other
major economy.
This isn’t marginal tinkering.
It’s a regime shift.
Déjà Vu: The 2009 Playbook, China Edition
Credit issuance in China has surged to levels not seen since the post-pandemic stimulus. And when Chinese credit expands, commodities respond—usually with a two- to three-quarter lag.
That means the next global inflation pulse could already be in motion, whether the West believes it or not.
Louis Gave of GaveKal put it bluntly:
“China today looks a lot like the U.S. in 2009—collapsing inflation, weak real estate, low confidence, and massive stimulus.”
We’ve seen this movie before. In 2009, those who understood the Fed’s liquidity flood early captured years of gains. Those who waited got left behind.
Now the playbook is repeating—only this time, it’s Beijing writing the script.
After seventeen years of underperformance, Chinese cyclical stocks just broke out of their downtrend. The CSI Upstream Index—tracking commodity producers—has gained 15% since July.
Commodities are confirming the move: Shanghai aluminum, copper, and the LMEX industrial metals index are all breaking higher.
This isn’t random noise. It’s how liquidity makes itself known. Quietly at first, then all at once.
And yet, the average US portfolio still has more exposure to Nvidia than to all of China combined.
Alibaba is up 107% this year. The iShares MSCI China Small-Cap ETF is up 41%.
Still, the Western narrative remains: “China’s collapsing.”
That disbelief is exactly what fuels the rally.
Bond Yields Don’t Lie
Even China’s bond market is signaling the shift. Ten-year yields have climbed from 1.65% to 1.87% since July, which is a clear sign that investors are pricing in growth, not deflation. The longest bond bull market in China’s history has ended.
Emerging markets are already riding the wave. Commodity exporters and regional partners are up more than 18% year-to-date, doubling the S&P 500’s return. The next global bull market may already be underway—with most investors looking in the wrong direction.
For fifteen years, US mega-cap tech has dominated the investment psyche. The Fed has been the only star in the show.
But the liquidity regime has shifted. The center of gravity has moved.
If you’re still watching the Fed to understand global liquidity, you’re reading last decade’s script.
At Flextion, we track these inflection points: the moments when underperformance flips into leadership, and missed opportunities become compounding returns.
Our platform bridges clock time and market time, helping investors position where the next cycle begins, not where the last one ended.
The money is moving.
The data is clear. Don’t fight the PBOC.
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Flextion is a breakthrough platform for evaluating fund strategy returns, helping investors identify managers at a pivotal turning point—those poised to outperform after a period of underperformance. Designed by seasoned portfolio managers, Flextion bridges the gap between “clock time” and “market time,” empowering investors to unlock long-term value and uncover hidden performance potential.