The Unicorn Economy: The Great Liquidity Drought

An investigation into the "Series A Crunch"

Eight years ago, I wrote a (rather long) piece called the Unicorn Economy. The core argument of the piece was a relatively simple concept, but one that a lot of folks had good reason to ignore at the time:

The Unicorn Economy runs on ZIRP.

Rates were ~zero, meaning Net Present Values (NPVs) were high.

When rates went up (because of inflation, China sell…