Peter Schiff : We Cannot Recover from Repo

This Repo has gone on for too long now, it's serious. The entire operation is meant to hide the real problem, which I believe is the gigantic derivatives overhang. With deteriorating interest rates, many of these weapons of mass financial destruction are starting to fail spectacularly. When many of these no longer functions as collateral, it is obvious what will happen. The game being played by the ESF to suck up the massive selloff of foreign held treasuries is the reason for the disconnect. There is probably nobody that has a complete picture of how all the swap derivatives are cross owned by the large banks. Rob Kirby explained how they've managed to divert the inflation, but the side effect is what we are witnessing right now - the derivatives bomb is about to blow up. The disgusting games the US has played with never-ending fraud and fidgeting has come full circle now. All I hope for now is that whatever war they have planned will be exposed and fail. All the games have to stop now, all the lies and deceptions have gone way too far. The end of "interest" is coming. No one can borrow any more. That alone will end the Fed. Without interest, what would then be their job! Only to crash the system, then step in as our savior. There is no recovery from this. We cannot overcome the repos. And the rate is compounding now. Liquidity is freezing up. Buckle up. Welcome to The Atlantis Report. The Fed has become the great enabler. A crucial role of a reserve currency is to force other currencies to toe the line or pay a stiff price. Ignoring this economic reality translates into pain for those holding the currency of any country that abuses this economic law. Fed interventions in the repo market are getting worse and worse. What was meant to be small and temporary seems now to be vast and permanent? Investors are asking, "What is the Fed hiding?" The rapid expansion of debt and credit during the last decade could have occurred without the Fed being complicit and in agreement. It has been the Fed that decided to allow the dollar to be used as a global prop. Trump's desire to manipulate the dollar lower to boost exports would take the World down a very slippery slope. Trump is now openly manipulating the stock market and punishing the savers and the middle class. Rate cuts are only to make Trump look good, A band-aid to keep the wound from hemorrhaging before the next Election. The Fed has been printing non stop for a decade, after a decade of recovery,record unemployment rate,flat inflation rate,record low black unemployment rate,yet more folks than ever on welfare,more people than ever dependent on that government check,that government handout,that government contract,that government subsidy which means the Fed will need to keep printing around the clock non stop . Last Tuesday, the S&P 500 made a record high as markets anticipated another Fed rate cut. Some analysts say the significant risk is that we see a boost in asset prices but no real uptick in the actual economy. Peter Schiff appeared on RT Boom Bust to talk about it. He said investors buying onto all of this Wall Street hype are in for a painful awakening. The conversation started with a focus on the so-called "phase-one trade deal." Optimism about a trade agreement has been a significant factor in pushing stock markets up. But there is growing doubt about whether a deal will get done. That raises a big question: if phase-one is this hard to nail down, how bad will phase-two be? Peter cast doubts on whether there will even be a phase two. I think phase-one is simply a way for Trump to save face and to surrender in the trade war but still claim victory." Meanwhile, at the time of the interview, the Fed was prepping for a third rate cut of the year even as stock prices were hovering near 15-month highs. Peter said the Fed is walking a tightrope by claiming the cuts are just some sort of mid-cycle correction. And as he pointed out, only one year ago, the central bank was raising rates, and it forecast it would continue raising rates through 2019. It's not just that they're cutting rates. They're back to quantitative easing. They have called off quantitative tightening. They've reversed course. They're doing quantitative easing, except they're not admitting that's what they're doing because they're embarrassed to have to acknowledge this. But if you actually look at how fast the Fed's balance sheet is growing now, it's actually becoming more swiftly when they're 'not doing QE' than when they were." The Fed is currently doing about $60 billion a month in bond purchases, and it's injecting $130 billion a night in repo operations. Why is the Fed injecting so much liquidity into the system when they claim nothing is wrong? Just ignore what they say and look at what they do. Look, they are trying desperately to keep the air from coming out of this bubble. But it's not going to work. The bubble has already popped. The only question is, how fast is the air going to come out, and when is the market going to figure out that the game is over?" Peter said all stocks are tremendously overvalued right now because of the Fed and the monetary policy that it has pursued. What the Fed is trying to do is keep those asset prices from coming back down to earth. Peter mentioned the fact that Trump tweeted out that the US should follow Europe and Japan down the path to negative rates. Peter said Trump is ignoring the people who would be stuck with the bill. It's the savers that should be getting paid by the borrowers who are borrowing money. It's the citizens who are going to end up losing because they are financing these loans. But all of this is producing malinvestment. It's helping to expand government at the expense of the real economy." One of the RT hosts played devil's advocate and suggested that the Fed rate cut might be prudent given the trade deal might not go through. Look, the one thing the rate cut is not is prudent. It's a desperate attempt, again, to keep the air from coming out of the bubble, to maintain false consumer confidence. You know, consumers are confident despite the fact that the economy is a disaster. They don't have any money. They have lousy jobs. They have no savings. They're loaded up with debt. But as long as they can keep on borrowing money to buy stuff they can't afford with money they don't have, for some reason they remain optimistic. And you have all of this hype coming out of Wall Street, coming out of the media to try to encourage all of this false optimism. The Fed plays into that. The Fed keeps talking about how the economy is in a great place, even as they've got it on life support. So eventually, the consumer is going to figure out just how bad the economy is. Unfortunately, it's going to be too late for him to do anything about it, and he's going to be blindsided. But I think it's the investors who are in for an even more painful awakening." Jerome Powell, now the Fed chairman, warned back in 2012 that the markets had become addicted to Fed stimulus and that any tightening of liquidity by the central bank, including cutting the balance sheet or raising interest rates, would cause a sharp reversal or crash. As soon as Powell became chairman, he ignored his own warnings and tightened liquidity anyway.' This was the test run to show that it would work as predicted. It was then reversed to give the 'players' time to convert to hard assets. Buffett has been hyped as a stock market genius, but anyone paying attention knows that if it is on his list, he buys 'all the stock' and takes it private. Converts to hard assets. Buybacks with borrowed money are off-loading debt onto shareholders while the 'players' convert to hard assets. Debt is debt. Hard assets are hard assets unless they are encumbered. Don't make the last payment on your car loan and see who really 'owns' it. I'm neither Democrat nor Republican. But I see Trump divest himself of all stock (convert to hard assets). Then he talks his book (brags about how well the market is doing). But he's in hard assets and moving to lower his taxes. Show me what a man does, and I'll show you what he believes. He selected Powell. He knows what's coming. Like Buffett, I think, said, 'when the tide goes out you see who's swimming naked.' I don't think the 'players' have a debt jubilee planned for the marks. A government that borrows to service its debt interest is insolvent. It's only a matter of time. The debt will be too massive to service soon. How soon? Within ten years. Once the US Dollar is no longer the global reserve currency .It's game over. Maybe a solar flare or EMP will be blamed for the financial disaster but not the FEDERAL RESERVE. The Fed will get blamed for nothing. So much noise and confusion to keep the eyes off the hidden hand. There's a grand illusion being shown so that no one talks about what's really going on. It's like a Giant Grizzly Bear at the front door, and leaving the house is impossible. Here is the reason for our stellar earnings season, great GDP print (1.9%), and sparkling employment report (jobs expected 85 000, actual 128 000) in an economy that needs 200 000 new posts a month just to break even. The FED isn't cutting interest rates because it's been at a Zero Interest Rate for about a decade now. The sick part of this scheme is that Americans have been losing money to inflation for a decade. American savings accounts are being decimated by APY's, annual percentage yields, that are blown out by the inflation rate. People who put their money into "savings" are actually losing cash value due to inflation. The only place the FED has to go is the Negative Rates. Let's see them try that fraud scheme. All banks are over-leveraged and need infinite QE. It's about keeping the Illusion Alive that the World needs Private Central Banks. The Central Bankers around the world are driving the bus over a cliff. There are no free markets anymore. All markets are rigged, just like there are no bond vigilantes anymore. They are now extinct. The Fed will buy every asset it considers essential to keep the bubbles inflated. The best-case scenario for the US economy is the WORST case scenario. Blow the bubble up even more and watch the sheep get suckered in. This is the great secular depression leading to the greatest depression ever. The Fed seems quite okay with the wealth gap widening with the undercurrent of poverty taking over while they propagandize us senseless with manipulated statistics. What people see with their own eyes as they watch their neighborhoods get annihilated is stronger than any statistic.











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