Nothing Is (Ever) Normal: Measuring economic cycles is like comfort food for investors. As sure as the sun rises and sets, we can count on cleansing downturns to pave the way for healthy growth. The reality is far more complex. Obviously, the sun doesn’t rise or set. But it is far more romantic than observing “Earth’s half rotation” and “Earth’s complete rotation.” Economic cycles were invented in 1946, a relatively short history. Yet, all agree that there is no natural periodicity, no normal cadence. We romanticize cycles as a scientific account of factors like production, employment, and inflation that can provide clues for asset allocation. The US dollar rises in recession, inflation assets lag the cycle, and emerging markets crack when US bond yields surge – these are lessons learned over long periods but only a few cycles. And this cycle isn’t behaving anything like those periods. Balance sheets are the factor that differentiates cycles, a blind spot for markets and policymakers alike. Japan’s “normal” recovery was decades in the waiting, despite massive fiscal and monetary easing. Balance sheet recession became the termed reason long after the failed experiments, with a footnote that the outcome was uniquely Japanese. Fortunately, financial markets provide clues on when our cyclical priors are being shattered. Today, the US dollar is notable, on a declining trend for four months now. It’s a powerful macro tailwind for digital asset markets. And the digital ecosystem has an advantage over conventional markets in the recovery – balance sheet repair is done the old-fashioned way, by extinguishing bad assets and everything on their path. There are no zombie balance sheet companies in digital – there’s no centralized agency to inadvertently direct the outcome. Now that’s normal.