Central banks are playing a dangerous game. In Q3 2022, almost 100% were hiking rates, crushing risk assets. But the tide is turning…
JY's secret weapon? Draining $2.5T from the reverse repo program, effectively re-leveraging the financial system. Gold went from 2k-ish to 3.5k-ish. Bitcoin went from 15k-ish to $100k-ish as a result.
Key metric to watch: The MOVE Index. When it hits 140, policy makers WILL step in and pump liquidity. It's like a financial bat signal.
US deficit is already tracking 22% higher this fiscal year. Biden, Trump – doesn't matter. The spending machine keeps rolling.
Foreign sovereigns are getting nervous. After Russia's treasury seizure, countries are buying gold instead of US bonds. Trust is eroding.
The banking system is constrained by Basel III regulations. Commercial banks can't just buy treasuries like before. Something's gotta give.
Buybacks are the new "not-quantitative easing" – a clever way to inject liquidity without calling it money printing. Wall Street's magic trick!
US tax receipts are dropping. Stock market down = less capital gains. The system is running on fumes.
Political reality: No politician can cut Social Security, Medicare, or defense. These are third rail issues that guarantee continued spending.
US-China tensions + mid-term election next year = guaranteed money printing. Politicians will do ANYTHING to create an illusion of economic strength.
Bottom line: Full send. Not a prediction, but a mathematical inevitability of global monetary policy.
