Wednesday, April 20, 2022

Prepare for Perpetual Inflation as Repo Madness Goes Hyperbolic

Prepare for Perpetual Inflation as Repo Madness Goes Hyperbolic

Repo Madness Gone Hyperbolic -- Economic Collapse & Market Crash Looming !! The FED admits it injected over $6 trillion in 6 weeks already. This is going exponential. Imagine what the real numbers are. All of this monetary BS just to keep the banks from paying slightly elevated rates for overnight money. Let the market work. The Federal reserve emergency/overnight lending to US banks is at a record $4.2trillion. More than the entire federal budget. Where is this money coming from. And are we about to fall into another financial crisis? The Fed’s total assets are at $4.2 trillion. Most of that was built up during the financial crisis by buying long term treasuries for QE, not for the recent overnight interventions in the repo market. The combination of the overnight and some longer-term loans has added about $400 billion to the Fed’s balance sheet since September. This money is created by the Fed, the only entity in the US who can create dollars out of thin air. Are we about to fall into a financial crisis? The problems in the repo market are concerning, but the Fed seems bound and determined to keep a lid on it. As long as the quality of the collateral is poor, interest rates will rise, REPO MADNESS must continue. And there is nothing that says the quality of the collateral will improve. JP Morgan is literally right in the middle of all this. It sounds like there's not enough high-quality collateral in the system. Maybe the government should ramp up; it is spending so that the Fed can engage in super-POMO. I hate our Zombie-Ponzi monetary system. The above is what the frauds in the Fed and government need to do to kick the can just a little further. Those with long memories may recall we had similar repo events during 2007-2008. If memory serves, this is the last time (prior to September) the Fed had to intervene this much in the repo market was back in the 2007-2008 global financial crisis. At that time, liquidity dissipated as money lenders doubted the quality of the collaterals provided by borrowers. As a result, investment banks such as Lehman Brothers and Bear Sterns became insolvent. Next, Panic hit, and lenders demanded cash from borrowers. This ignited one fire sale after another as borrowers dumped their securities to pay for their loans. This spilled over to the stock market, and the rest is history. The crash is literally here. It's just happening in a vehicle no one understands. Recession coming.QE. We have a larger economy and need a bigger balance sheet.QE Either way, ANY WAY.QE. Perpetual QE. The more funny money the fed injects, the closer to the end this game of musical chairs gets. When you switch to gold and cryptocurrencies, it is like you stop playing and just watch while you get richer over time. Its a strange but pleasant feeling. Welcome to The Atlantis Report. And yet, there is no discernible financial collapse occurring on Wall Street. In fact, the Dow Jones Industrial Average and Standard and Poor’s 500 Index achieved multiple record highs in the month of December 2019 . Making it appear that the Fed’s money to these trading houses is going straight into the stock market. That is about as far from the Federal Reserve’s monetary policy mandate as it can get, and yet there has been no editorial outcry from the Editorial Boards of American newspapers or any publicly announced Congressional investigation. Yes, indeed, what the hell are the regulators doing! Why is no one taking these people to the task? Central banks are not supposed to be in the business of pump and dump, and that is clearly what is happening here, so in terms of the policy, they are operating outside their remit, and in terms of the law, they are likely engaging in illegal financial activities. This is getting ridiculous trying to find a wrecked truck to rebuild or, for that matter, a used one. Inflation has hit there, and health care, do not get sick and well food, edible food most of all. They are continuing the inflation/deflation saw, literally a saw, first one, then the other, then the other, then the other. Just imagine walking down the street and being attacked by thugs daily that punch you in the stomach, the face, the groin, and one guy is in charge of heisting your wallet during the scrum. Rinse and repeat this daily, that's our world. This is great news! It gives people a chance to get more Bitcoin and gold before the bottom drops out of the fake money scam. Gold has become a must-own insurance asset. It isn't just the technicals, which short-term look over-bought due to high RSI, but the litany of fundamental factors which have been stretched too far ever to be solved through a normal correction. Like interest rates, which can now never be normalized without causing massive stress, budget deficits which can never be reduced, pension and entitlements liabilities which can never be fully funded, etc. This last price move, combined with ten years of built-up general market excesses, combined with a large-scale, steady, determined, persistent, buying by major investors determined to hedge US dollar assets, much lower trading and storage costs, and large scale abandonment of precious metals during the past seven-year bear market; are finally pushing gold across the rubicon into that of fulfilling a role once again as a mainstream asset. In a colloquial sense, it is probably about that time where generalist investors say, "oh, eff it!" and realize how dramatically underweight they are in crisis insurance assets in general and gold in particular. This is no better demonstrated by the gold weightings across asset management heavyweights, who are now going to have to do what they always do with gold, which is pile in at any price. Watch for more positive gold price action as this big tide turns. If all these hurting banks weren't pumping so much money into the stock market, they wouldn't need the Fed to bail them out time and time again, so why doesn't the Fed just change the rules to make them maintain more cash on hand. (rhetorical). Banks could stop this repo issue today, all they have to do is stop loaning money and rein in their balance sheets. That they don't suggest, they can't. Because if they did, the interest rates would necessarily skyrocket. The Crowding out effect. Both the silver manipulation and the over loaning by banks shows fundamental tensions in the system. The tension that is driven by debt. Silver is manipulated lower to leverage gold down and mask the real problems. This is a problem created by central banks that will not be blamed on them because they always escape scrutiny. If you are a bank and you have your own reserves. Why should you offer your reserves and bear whatsoever risk when you have the FED, that is willing to make your work and bear all risks. MORAL HAZARD cubed. The Federal Government has grown so large that it is sucking the liquidity out of the system. They sell Treasuries, and to replace the liquidity sopped up. The Fed has to go buy them back. It's that simple. The new QE is because of this. The FED is following the MADOFF plan, which worked so well, until, well, it didn't. Until then, you citizens are all investing mavens. Treasury bond markets are dry. The Fed has to mop up quickly before others do. The government has to keep going issuing new debt, or the markets will crash because the Fed could not provide the daily liquidity infusions otherwise. So forget about a balanced budget, it can never happen. Virtually all debt is being monetized, including old debt that isn't being rolled over. America has become Weimar Germany. We just don't have hyperinflation yet. Europe is in a recession, Japan has been offering negative interest rates for some time, and the rest of the world is messy- given Saudi Arabia, Venezuela, Iran, China, and trade war, Brexit (how bad can they screw this up), Yemen, Russia, North Korea, Trump ‘impeachment’ for Ukraine and so on. These issues will and can impact our economy, which has been slowing, so the FED is dropping, which is supposed to incentivize our country/corporations/small businesses that lower rates will make it cheaper to expand/hire. But with rates so low anyway, it is more an emotional exercise to show the FED is watching and will help to keep us out of a recession. Boy, what we really need right now is a major distraction, perhaps a military conflict of some sort. That's what I'd do if I wanted to knock us back into a dark age. Best to let the financial system collapse and let us spend the next 5-10 years fighting over where we go next. Me thinks that this is the last leg homeward bound for the money printers. The Fed finally got it and is currently in the process of validating (yet again) Von Mises: "There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved." - said, Ludwig Von Mises. The secret to never having to have another Lehman moment is to keep the printing presses running 24,7,365, simply. Me thinks the gold enthusiasts will finally be getting their wish! One thing is for sure: gold always tells the truth. It can be manipulated, but once the herd makes its move, there's no controlling it. One fine day, the plebes will wake up and ask What the hell is going on. Gold is now trading at $2500 an ounce, and all hell will break loose. It will last as long as there is confidence. Take a look at an exponential curve and tell me again why you think this charade can continue for another decade or two. It's been 50 years since the dollar was decoupled from gold. We are finally on the business end of that curve right now. I have news for you: advancement on the x-axis won't be continuing for another 10 or 20 years. The real name of the killer has finally broken out of this "new math" for running the banking system. And the black swan has come into focus. It's the repo market. Yes, it all goes back to maintaining credit and liquidity. Bill Holter was right. Mr. Doom himself, but a nice guy in a cowboy hat. He and about another ten economists described the failure framework, and now we can actually give the cause a name. "Repo." Well, at least now we know. Stash some cash and keep stacking gold and silver. This Was The Atlantis Report. Please Like. Share. And Subscribe. Thank You.

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