What if China's bank-recap needs force de facto PBoC monetization of sovereign bonds?
The scale of LGFV and bank-recap needs forces de facto PBoC monetization via special sovereign bonds, raising questions about fiscal dominance and the long-run integrity of the yuan.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. The scale of LGFV and bank-recap needs forces de facto PBoC monetization via special sovereign bonds, raising questions about fiscal dominance and the long-run integrity of the yuan. The trigger decomposes into signed root‑shocks — EM currencies ▼ · China growth ▼ · Dollar/reserve confidence ▼ · Inflation surprise ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +1.8% hist -0.11–+2.73% · other way +29.98% (n=12) |
| 2 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +1.1% hist +0.33–+0.72% · other way +0.27% (n=12) |
| 3 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +1.0% hist -2.78–+2.12% · other way +6.55% (n=12) |
| 4 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.7% hist -0.36–+1.52% · other way +24.57% (n=12) |
| 5 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.6% hist -11.39–+6.27% · other way -1.88% (n=12) |
| 6 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.6% hist -0.32–+0.32% · other way +0.44% (n=12) |
| 7 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +5bp hist +0.73–+5.34% · other way +6.2% (n=12) |
| 8 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +5bp hist +0.51–+5.16% · other way +6.6% (n=12) |
| 9 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +0.5% hist -0.22–+0.28% · other way -0.48% (n=12) |
| 10 | Freeport (copper) FCX 📈 chart | Equity | ▼ -0.5% hist -2.22–+0.79% · other way +1.31% (n=12) |
| 11 | Copper XCUon Hyperliquid 📈 chart | Commodity | ▼ -0.4% hist -0.56–+0.01% · other way +2.76% (n=12) |
| 12 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▲ +0.4% hist -0.24–+0.29% · other way -0.77% (n=12) |
| 13 | China internet KWEBon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -4.28–+1.26% · other way +2.32% (n=12) |
| 14 | Alibaba BABAon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -1.73–+0.44% · other way -1.39% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 31 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| SOL SOL | SHORT | -11.7% · 5d -17.0% | 69% | 13 | 0.28 | ⚠ differs |
| Volatility VIX | SHORT | -5.0% · 5d +8.2% ↺ fades | 67% | 21 | 0.28 | · |
| EURUSD EURUSD | SHORT | -0.4% · 5d +0.2% ↺ fades | 68% | 19 | 0.27 | ⚠ differs |
| KWEB KWEB | SHORT | -3.8% · 5d -3.6% | 63% | 19 | 0.25 | ✓ matches cascade |
| US dollar DXY | LONG | +0.5% · 5d +0.1% | 64% | 30 | 0.23 | ⚠ differs |
| BABA BABA | SHORT | -1.4% · 5d -3.6% | 63% | 19 | 0.22 | ✓ matches cascade |
| GBPUSD GBPUSD | SHORT | -0.4% · 5d -0.2% | 63% | 19 | 0.21 | ⚠ differs |
| ETH ETH | SHORT | -8.1% · 5d -9.0% | 62% | 16 | 0.20 | ⚠ differs |
| 30y yield DGS30 | LONG | +2bp · 5d -4bp ↺ fades | 58% | 29 | 0.15 | ✓ matches cascade |
| XCU XCU | SHORT | -0.3% · 5d -1.0% | 58% | 19 | 0.11 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.2% · 5d +0.3% ↺ fades | 58% | 19 | 0.11 | · |
| 10y yield DGS10 | LONG | +2bp · 5d -5bp ↺ fades | 52% | 30 | 0.05 | ✓ matches cascade |
| MSTR MSTR | LONG | +1.6% · 5d -5.2% ↺ fades | 53% | 19 | 0.04 | ✓ matches cascade |
| Gold XAU | SHORT | -0.1% · 5d +0.0% ↺ fades | 53% | 19 | 0.04 | ⚠ differs |