The Nomad Economist and Lynette Zang 4-21-2022
Prepare for Perpetual Inflation as Repo Madness Goes Hyperbolic
The Nomad Economist: 4-20-2022
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.
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.
CBDC’s, MORTGAGES & GOLD…Q&A with LYNETTE ZANG & ERIC GRIFFIN
QUESTIONS:
0:00 Overview Question 1: 0:46 How will the price of silver ever become detached from the COMEX?
Question 2: 8:29 I own a business, and I need to pay employees and operate things day to day. That means there is a significant amount of cash in the business account. Is there any way of shielding or protecting that cash? Does it even matter if I keep under $250,000 in each account (can I trust FDIC insurance)?
Question 3: 11:20 I took out a 15-year fixed mortgage, and I do have the ability to pay it off in cash if needed, what circumstances could you foresee that would make it crucial to pay it off sooner?
Question 4: 12:59 Lynette if you were able to ask Powell questions on live television what questions would you ask him?
Question 5: 14:15 How do you not accept a CBDC or digital dollar or buy into that system? What would happen? Can we keep the fiat version or will it be hyper-inflated to be valueless?
Question 6: 17:04 Please explain what does "run off its (Fed's) balance sheet" mean?