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Speaker 1: Hello, Welcome back to another episode of The Mark Moss Show.

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Speaker 1: We're always talking about building your wealth, building your freedom,

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Speaker 1: and protecting both because times are changing and they are

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Speaker 1: changing fast. Today, I want to talk about what happened

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Speaker 1: last week with an almost failed US Treasury auction. Now

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Speaker 1: that may sound very boring, but trust me, it is not.

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Speaker 1: We are coming very close to the end game. As

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Speaker 1: a matter of fact, mainstream has finally picked up on

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Speaker 1: this narrative and they are calling for the endgame. In

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Speaker 1: the endgame could be coming in the next ninety days.

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Speaker 1: As a matter of fact, we have a chart that

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Speaker 1: we are watching that predicts when this end game could come.

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Speaker 1: That endgame is when, yes, the government runs out of money.

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Speaker 1: We have a failed treasury auction, and even worse can happen. Now,

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Speaker 1: let's dig into all this. What actually happened last week?

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Speaker 1: How bad is it? What is the trend showing us?

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Speaker 1: What is this chart that we're watching, What happens in

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Speaker 1: ninety days that could cause us all to fall apart

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Speaker 1: unless some big things are happening and done, which I

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Speaker 1: think they will. Of course, I'm an inflation bowl. I'm

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Speaker 1: gonna explain to you why all of that works. What's

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Speaker 1: the big news here? Right off the bat, The big

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Speaker 1: news is that last week we saw the US treasury

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Speaker 1: auction almost fail, and so what does that mean. So

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Speaker 1: the government is spending more than they're bringing in. You

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Speaker 1: know that they finance that through deficits, the deficit spending.

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Speaker 1: There is the amount of shortage that they have, and

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Speaker 1: they finance that through borrowing money. The way they borrow

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Speaker 1: money is by selling bonds, So then people have to

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Speaker 1: come buy those bonds. Now, prices are always the equilibrium

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Speaker 1: of supply and demand. So if there's more supply, if

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Speaker 1: the government's trying to sell more debt, then there is demand,

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Speaker 1: then there are buyers. The price has to go up

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Speaker 1: to enhance entice the buyers. And that's exactly what we

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Speaker 1: saw and it was catastrophic. As a matter of fact,

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Speaker 1: it was the worst treasury auction that we've seen since

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Speaker 1: twenty eleven. And the treasuries, what the government had to

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Speaker 1: pay went up up so high that it created a

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Speaker 1: massive tel I'm going to break this down. And it

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Speaker 1: was so bad that the credit rating agencies Moodies came

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Speaker 1: out and move the sentiment of the government down to negative,

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Speaker 1: citing the very fact that they have unsustainable debt and

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Speaker 1: they can't afford it. As a matter of fact, we

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Speaker 1: saw Moody's, which is the one that did this. They

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Speaker 1: lowered its outlook on the US credit rating to negative.

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Speaker 1: It went from stable to negative, citing large fiscal deficits

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Speaker 1: and a decline in debt affordability. So it is not

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Speaker 1: crazy people like me on the internet, on YouTube and

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Speaker 1: podcasts seeing this thing. The credit rating agency says, these

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Speaker 1: large fiscal deficits, the amount of debt that you're short

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Speaker 1: every year, and the declining in the affordability of your

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Speaker 1: debt are major problems. Of course, the government didn't like it.

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Speaker 1: President Biden got all mad about it. But look, it

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Speaker 1: is what it is, they said. I said, it's a

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Speaker 1: rising concern for investors, contributing to a sell off that

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Speaker 1: took US government bond prices to the lowest level in

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Speaker 1: sixteen years. According to the chief economist from the US

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Speaker 1: at Natoxis, deficits will remain large as an interest costs

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Speaker 1: take up a larger share of the budget. The debt

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Speaker 1: burden will continue to grow. And it's not just continue

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Speaker 1: to grow. It turns into a debt spiral. It turns

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Speaker 1: into a coil that winds up and gets power and

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Speaker 1: then blasts off. So we're going to talk about that,

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Speaker 1: but let's just talk about what happened first of all.

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Speaker 1: All right, So I don't want to go exactly all

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Speaker 1: the way through exactly how this works, but let's just

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Speaker 1: take a look at exactly what happened last week. So

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Speaker 1: what we saw is that again the Treasury, we went

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Speaker 1: to market to try to raise this money. Now there's

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Speaker 1: a couple of things that are important that I want

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Speaker 1: to start with first. So first of all, it's not

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Speaker 1: just you and I seeing this. It's not just a

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Speaker 1: moody seeing this. The Treasury itself already knows this. And

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Speaker 1: how do I know that they know this. It's because

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Speaker 1: they've said so. And what they're doing is they're trying

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Speaker 1: to game the system. So what they do is they

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Speaker 1: announce how much they're going to be borrowing. So what

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Speaker 1: we saw is that the Treasury announced they would be

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Speaker 1: borrowing seven hundred and seventy six billion for the fourth

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Speaker 1: quarter of twenty twenty three. And the reason why it's

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Speaker 1: important is because they announced that they're going to be

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Speaker 1: borrowing less than they had borrowed the prior quarter. Seventy

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Speaker 1: six billion dollars less. So what they're trying to say is, look, look,

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Speaker 1: our deficit spending is going down. We're borrowing less money

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Speaker 1: than we borrowed last time. Instead of eight hundred and

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Speaker 1: fifty billion, now it's only seven hundred and seventy six billion. Okay,

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Speaker 1: big deal, But they're trying to show that it's going down.

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Speaker 1: But here's the thing. They're lying. And what do I mean

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Speaker 1: by they're lying. What we can see is that they

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Speaker 1: announce this number, but they go back and revise it later. Oh,

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Speaker 1: turns out we needed to borrow more. We're going to

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Speaker 1: borrow more than we had projected, and every quarter it's

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Speaker 1: the same thing. It's not just that we see it.

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Speaker 1: The Treasury actually told us this. Let's break this down.

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Speaker 1: So what we can see is that they came out

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Speaker 1: with an announcement and they said that, you know, we're

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Speaker 1: going to be borrowing less money than projected. But there's

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Speaker 1: more in this that I want to unpack. And what

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Speaker 1: is that. Well, there's three things, three points that were

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Speaker 1: in the statement from Janet l in the Treasury that

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Speaker 1: I think we need to break down. First off, the

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Speaker 1: first thing they said is quote primary dealers explicitly noted

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Speaker 1: a high degree of uncertainty overall around the deficit and

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Speaker 1: growth forecasts, reinforcing the Treasury's need to maintain flexibility in

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Speaker 1: their issuance strategy. That's what this is what Jane Allen

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Speaker 1: Treasury said. So what does that mean, Well, the primary

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Speaker 1: dealers who's that? That's the banks. This is like the

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Speaker 1: Golden Sacks. These are the buyers of last resort. These

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Speaker 1: are the buyers that the government mandates to buy the

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Speaker 1: debt for them. So they're saying that these buyers of

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Speaker 1: last resort at the banks are seeing this high degree

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Speaker 1: of uncertainty around the deficit and the growth forecast. Exactly

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Speaker 1: what Moody said. So yelling herself is saying, we see

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Speaker 1: they're saying this, and so what it means is that

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Speaker 1: they're admitting that the primary dealers are uncomfortable with this.

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Speaker 1: They're admitting that they're concerned about the demand for these treasuries.

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Speaker 1: They're concerned with being stuck with this. They don't want

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Speaker 1: to do that. Remember this point. We're going to come

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Speaker 1: back to it at the end when we break down

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Speaker 1: some of the math. Point Number two is that the

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Speaker 1: Treasury anticipates that one additional quarter of increases to cupon

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Speaker 1: auction sizes will likely be needed beyond the increases announced today.

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Speaker 1: So what does that mean? That's what I was just saying.

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Speaker 1: Every single time they announce how much they need to borrow,

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Speaker 1: they go back and revise that. So what they're saying

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Speaker 1: is that the Treasury is expecting to add to the

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Speaker 1: amount they need to borrow this quarter beyond these estimates.

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Speaker 1: So they're telling you right there that they're basically lying

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Speaker 1: to you. They're saying, Hey, we're probably going to have

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Speaker 1: to to this, so we're going to show you the

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Speaker 1: short number we're probably going to add to it. I

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Speaker 1: don't know who they're really fooling by this. I mean,

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Speaker 1: you know, I'm just some guy on the internet here

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Speaker 1: and I see that every month or every quarter they

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Speaker 1: go back and revise this. They're telling us that they're

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Speaker 1: going to do it right here, Who are they really

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Speaker 1: fooling here? Number three, they said that the Treasury continues

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Speaker 1: to make significant progress on its plans to implement a

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Speaker 1: regular buyback program in twenty twenty four. That's the big one.

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Speaker 1: What are they saying. They're saying that the Treasury is

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Speaker 1: ready to implement a program to buy back their own debt,

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Speaker 1: basically buy their own debt, sort of like what Japan does,

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Speaker 1: sort of like a snake eating its own tail. What

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Speaker 1: they're saying is, we're not done here. We have many

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Speaker 1: more magic tricks up our sleeve. This is something I

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Speaker 1: talk about a lot. You know, there's lots of brilliant

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Speaker 1: market analysts out there, way more brilliant than me. One

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Speaker 1: of my favorites has been Harry Dent Junior. I've read

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Speaker 1: like five of his books. His research is so good

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Speaker 1: I believe actual his research is correct. His assumptions have

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Speaker 1: been wrong. His research is right, his assumptions are wrong.

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Speaker 1: He's continually called for a crash, a crash, a crash,

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Speaker 1: a crash, crash that never comes. And the reason why

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Speaker 1: it never comes is because he just continues to fail

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Speaker 1: to realize how many more tricks the FED has up

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Speaker 1: their sleeve. If things worked normally, he would be right.

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Speaker 1: But they don't. And what they're telling us right here

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Speaker 1: is they have more magic tricks up their sleeve. This

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Speaker 1: is why Harry Dan's wrong, This is why Peter Shift's wrong.

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Speaker 1: This is why all of these people calling the Michael

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Speaker 1: Burry's are wrong. They're all confists to happen, but they

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Speaker 1: fail to realize how many more tricks they have up

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Speaker 1: their sleeve. If you just tune in, you're listening to

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Speaker 1: the Markmas Show. I have a whole lot more to

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Speaker 1: cover when I come back about what is going on

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Speaker 1: with the treasuries and where we're going. You don't want

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Speaker 1: to miss it, don't go away, I'll we're back, all right,

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Speaker 1: welcome back. If you just tune in, you're listening to

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Speaker 1: the Mark mass Show. We're talking about what happened last

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Speaker 1: week where we almost had a failed auction. So let's

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Speaker 1: break down how that happened. So there was a thirty

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Speaker 1: year auction, so you have everything from t bills up

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Speaker 1: the bonds, and that's the duration anywhere from months to

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Speaker 1: years or decades in this matter. And they sell these entranches.

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Speaker 1: So in the thirty year auction, they wanted to sell

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Speaker 1: twenty four billion dollars of that. And what happens is

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Speaker 1: there's something called a bid to cover ratio. It's a

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Speaker 1: BTC and that means how many bids, how much demand

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Speaker 1: is there for the supply that they're offering, and what

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Speaker 1: this is usually represented in a number and we saw

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Speaker 1: that this one came in at two point two four percent,

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Speaker 1: which doesn't really maybe mean anything to you. So we

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Speaker 1: have to sort of look at history and we can

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Speaker 1: see this is typically around two point five or two

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Speaker 1: point six, So to go from two point six to

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Speaker 1: two point two, that's very low. And what we can

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Speaker 1: see is that it looks like foreign demand was off,

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Speaker 1: but really I don't think it's exactly that. So what

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Speaker 1: do I mean by this? What we can see from

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Speaker 1: the Treasury report is there's basically three tranches of buyers

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Speaker 1: that they tell us. One they tell us about the

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Speaker 1: primary dealer. The primary dealers again are these buyers of

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Speaker 1: last resort. These are these banks. The second one is

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Speaker 1: what we call direct bidders. These are institutions and these

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Speaker 1: are individuals. And then third we have indirect bidders. Indirect

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Speaker 1: bidters are the foreign demand. These are foreign buyers. And

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Speaker 1: what we can see for this thirty year auction, if

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Speaker 1: we look back through a few auctions of this year January, October,

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Speaker 1: and now November, we can see that in January, the

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Speaker 1: primary dealers, which are the buyers of last resort, the

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Speaker 1: ones mandated to buy, took up nine percent of the

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Speaker 1: bonds in November. They well, actually before we talk about

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Speaker 1: let's let's talk. Let's let's talk. Okay, Well, let's talk

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Speaker 1: with that. So they bought nine percent in January. In

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Speaker 1: November they were forced to pick up almost twenty five percent,

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Speaker 1: so they have to suck up the difference. They had

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Speaker 1: to buy nine in January twenty five percent. So what happened, Well,

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Speaker 1: the indirect bidders, which are the foreign buyers, in January

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Speaker 1: picked up seventy five percent. In November, they only picked

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Speaker 1: up sixty percent. The direct bidders picked up sixteen percent

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Speaker 1: in January and picked up fifteen percent November, So the

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Speaker 1: direct bidders were about the same percentage. It was the

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Speaker 1: indirect bidders that fell off from seventy five percent to

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Speaker 1: sixty percent, and so the primary dealers had to pick

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Speaker 1: up the difference from nine to twenty five percent. But

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Speaker 1: that's not the whole story. What I really want to

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Speaker 1: show you is that it's the amount of auction that

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Speaker 1: the amount being auctioned off, it's the supply. So what

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Speaker 1: we can see is that the foreign buyers, the indirect bidders,

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Speaker 1: actually bought more bonds in November than in January. So

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Speaker 1: in January they bought thirteen point four billion. In November

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Speaker 1: they bought fourteen point three billions. They actually bought an

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Speaker 1: extra billion dollars worth of bonds. The problem isn't as

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Speaker 1: much the demand side. There's still demand. They actually bought

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Speaker 1: a billion dollars more than they bought before. The problem

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Speaker 1: is there's too much supply. The problem is the treasury

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Speaker 1: is spending way too much money and borrowing too much.

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Speaker 1: This is very important. As we get to this later part,

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Speaker 1: you're going to understand why. But the problem is the

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Speaker 1: government cannot and just will not stop spending. We're now

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Speaker 1: fighting multiple wars. Janet Yellen's out there saying we can

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Speaker 1: fight multiple wars. Sure, we're fighting a war on in Ukraine.

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Speaker 1: We're fighting a war on Israel. We're fighting a war

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Speaker 1: on terrorism, We're fighting a war on obesity, we're fighting

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Speaker 1: a war on poverty, we're fighting war, We're fighting every

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Speaker 1: single war you can imagine. And we're spending more and

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Speaker 1: more money. And the problem is is there's not enough

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Speaker 1: people willing to buy that debt. Now, like I said,

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Speaker 1: it's not a demand problem. The demand actually went up.

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Speaker 1: They actually bought more, But what happened because there was

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Speaker 1: more supply than there was demand. Then the price that

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Speaker 1: they had to offer the Treasury I had to offer

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Speaker 1: the buyers went up. Now, this is what happened. This

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Speaker 1: is what showed. This is how it shows how bad

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Speaker 1: this was. And so in this bid tocover ratio, since

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Speaker 1: there was enough buyers, the price had to go up.

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Speaker 1: So basically, the Treasury was hoping to sell this debt

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Speaker 1: for less than what they had to do it what

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Speaker 1: they had to sell it at, and the tail went

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Speaker 1: up by five basis points, five basis points. This is

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Speaker 1: what we call a gigantic tail, five basis points. We

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Speaker 1: haven't seen that since, like I said, two thousand and eleven.

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Speaker 1: So let's put this into context here a little bit.

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Speaker 1: If we had a lower bid to cover ratio and

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Speaker 1: it went up let's say six percent, we're at five.

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Speaker 1: If it went up to six percent, that'd pretty much

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Speaker 1: be a complete disaster. And what that would show the

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Speaker 1: world is that there's so much dysfunction the treasury market

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Speaker 1: that they can't trust it anymore. All right, That's what

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Speaker 1: it would show. Now because of that, because the yield

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Speaker 1: went up, then the bonds went up as well, and

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Speaker 1: they moved so much where it went down, they moved

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Speaker 1: in opposite. We're seeing these move and five basis point

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Speaker 1: move is sort of like risk asset that might be

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Speaker 1: something like we might see in the cryptocurrency markets, not

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Speaker 1: the US treasury bond market. The US treasure bond is

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Speaker 1: the global reserve asset. It's supposed to be what we

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Speaker 1: would consider a risk free asset. It's supposed to be

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Speaker 1: the most secure asset in the world. It's not supposed

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Speaker 1: to trade like a like a cryptocurrency, it's not supposed

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Speaker 1: to trade a like a meme stock. But yet here

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Speaker 1: it is. And this is the problem. We haven't seen

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Speaker 1: this much dysfunction in the treasury market since the two

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Speaker 1: thousand and eight financial crisis. Now we can see this

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Speaker 1: in an index called the move INDEXMOVE and it measures

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Speaker 1: this high volatility and it shows us how bad the

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Speaker 1: market conditions really are. And like I said, we haven't

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Speaker 1: seen this much dysfunction. We haven't seen this much problems

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Speaker 1: in this treasury market, in the largest, deepest, most risk

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Speaker 1: free market in the world, since twenty ten. And so

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Speaker 1: it's no doubt that we're seeing investors booped from both

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Speaker 1: the amount of debt that the Treasury is trying to

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Speaker 1: issue as well as how bad that auction went. But

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Speaker 1: here's where things really get interesting. What we're witnessing is

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Speaker 1: we're witnessing a showdown, a showdown of the Federal Reserve

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Speaker 1: and the Treasury, the US government. I've been talking about

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Speaker 1: this for a while. As a matter of fact, I

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Speaker 1: made a video, I want to say it was late

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Speaker 1: last year on my main YouTube, pianel Mark Moss talking

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Speaker 1: about this exact thing, how the Fed and Treasury were

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Speaker 1: at war. They were battling each other. You see, the

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Speaker 1: Treasury wants to continue to spend money. They want to

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Speaker 1: continue to pay for UBI, and pay for more for welfare,

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Speaker 1: and pay you not to work, and they want to

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Speaker 1: pay for wars, and they want to pay for all

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Speaker 1: these things, but they don't have the money to do it.

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Speaker 1: The Federal Reserve. They want the Federal Reserve to give

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Speaker 1: them the money, but the Fed doesn't want to. Why

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Speaker 1: because the Fed wants to control the dollar. They want

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Speaker 1: the dollar to remain strong. They're also trying to fight inflation.

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Speaker 1: If the Fed continues to give the Treasury more money

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Speaker 1: to spend than inflation continues to go up. So the

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Speaker 1: Treasury wants to spend money causing inflation. The Fed's trying

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Speaker 1: to bring inflation down. That's the battle. And so what

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Speaker 1: the FED is trying to do is trying to make

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Speaker 1: you and I broke, so you and I spend less

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Speaker 1: money to help bring inflation down. What the problem is,

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Speaker 1: You and I aren't the ones causing the massive amounts

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Speaker 1: of inflation. It's the Treasury doing this. But as the

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Speaker 1: Treasury is trying to sell these and there's not enough

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Speaker 1: people buying them, where are they getting the money to

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Speaker 1: do that? Because right now the FED is in what

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Speaker 1: we call QT, or quantitative tightening. So the FED doesn't

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Speaker 1: want to buy these bonds right now. As a matter

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Speaker 1: of fact, the FED wants to sell the bonds. And

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Speaker 1: at the same time they want to sell the bonds,

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Speaker 1: they're trying to raise the rates. But how can the

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Speaker 1: Fed be selling bonds into the market when the Treasury

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Speaker 1: is trying to sell bonds in the market and there's

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Speaker 1: not enough buyers for them. Well, one of the ways

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Speaker 1: they've been doing is the Treasury has been tapping into

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Speaker 1: the reverse repo facility. Now reverse repo facility was over

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Speaker 1: two trillion dollars and they've been taking the money from

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Speaker 1: the reverse repor facility, and it's been drained going into

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Speaker 1: the short end what we call t bills of this

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Speaker 1: of this debt, and this has been tapped, and it's

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Speaker 1: been draining at a pretty rapid rate, and we're down

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Speaker 1: to about one point four trillion in that right now.

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Speaker 1: The problem is, at the rate we're going, this is

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Speaker 1: going to run out very soon, and we know the

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Speaker 1: exact date at the current run rate. I'm going to

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Speaker 1: talk about that in a second when I come back.

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Speaker 1: If you're just tuning in, you listening to the Mark

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Speaker 1: Mass Show, talking through what happened with the Treasury almost

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Speaker 1: failed auction last week and what this means. I'll be

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Speaker 1: back with more a minute. Don't go away, We're back,

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Speaker 1: all right, Welcome back. If you're just tune in your

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Speaker 1: listening to the Mark Mash Show. We're talking about what

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Speaker 1: happened last week with the Treasury auction, how it almost failed,

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Speaker 1: and what this means and what to expect moving forward. Now.

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Speaker 1: I was saying that the Treasury has been pulling money.

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Speaker 1: Money has been coming out. I want to say they're

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Speaker 1: pulling out, but money's been coming out of this reverse

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Speaker 1: repo facility. And going into these short dated tea bills.

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Speaker 1: The problem is, at the rate we're draining this facility down,

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Speaker 1: it's looking to run out pretty quickly. As a matter

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Speaker 1: of fact, at the current run rate we're at, this

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Speaker 1: could be empty in the next ninety days. It's a

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Speaker 1: pretty big deal. If that is empty and the Fed

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Speaker 1: doesn't want to buy the debt, what's going to happen? Well,

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Speaker 1: remember we talked about the statement that the Treasury put out,

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Speaker 1: and in that statement they talked about a bond buy

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Speaker 1: back program and talked about how they wanted to get

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Speaker 1: it up and running. Well, my guess is that's the

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Speaker 1: magic trick they have up their sleeve. If they run

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Speaker 1: out of money in the reverse repol facility and the

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Speaker 1: Fed won't buy it, what will they do, Well, they'll

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Speaker 1: just buy it themselves. They'll just buy it themselves. They'll

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Speaker 1: be able to buy whichever bonds they want to make

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Speaker 1: sure there's enough liquidity in the treasury market. Who cares

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Speaker 1: if nobody wants them, We'll just buy on ourselves, right,

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Speaker 1: Why not? But how could you say? How could the

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Speaker 1: Fed achieve what they're trying to achieve, which is selling

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Speaker 1: off their bonds at a time when again there's no demand,

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Speaker 1: and I don't see how their's a way. I don't

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Speaker 1: see how the FED could possibly continue to raise rates

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Speaker 1: in this environment and continue to sell off bonds at

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Speaker 1: the same time. Now, this is what I've been saying.

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Speaker 1: I made a video about it on my main YouTube,

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Speaker 1: pianel Mark Moss, And today I saw a headline come

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Speaker 1: out from what we call the Fed's mouthpiece, Nick Timrose.

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Speaker 1: Nick Timrose is somebody that seems like the FED sort

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Speaker 1: of leaks information to and then Timros leaks it out

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Speaker 1: to the press. Why does this even happen, Well, because

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Speaker 1: the FED doesn't want to surprise anybody. You know, I

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Speaker 1: tell you what's going on, and I sort of read

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Speaker 1: between the lines for a year. But it's not like

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Speaker 1: this big secret. Guess the FED tells us this information.

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Speaker 1: They have this information leaked out because they do not

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Speaker 1: want to surprise the markets. They're trying to tell you

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Speaker 1: months in advance of what's going to happen. So, for example,

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Speaker 1: in November of twenty twenty one, they told us they

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Speaker 1: were going to start raising rates. As soon as that happened,

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Speaker 1: Bitcoin started selling off first, because it's the most sensitive

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Speaker 1: to risk assets. Then the Nasdaq, which of the tech stocks,

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Speaker 1: started selling off. But they didn't actually start raising rates

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Speaker 1: until like February of the following year, so it was

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Speaker 1: a couple of months. They told us they were going

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Speaker 1: to do it, but they didn't actually do it for

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Speaker 1: a couple of months. See, they want to give you

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Speaker 1: plenty of time to start planning, so they're not trying

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Speaker 1: to surprise the market, which is why they use people

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Speaker 1: like Nick Timrose in the press to leak this information.

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Speaker 1: And so today he said that the October payroll report

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Speaker 1: and inflation report strongly suggests that the Fed's last rate

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Speaker 1: rise was back in July. The big debate at the

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Speaker 1: next FED meeting is shaping up to be over whether

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Speaker 1: and how to modify the postmeding statement to reflect the

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Speaker 1: obvious the central Bank is on hold, so the Fed whisper,

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Speaker 1: he's telling us that the Fed is done hiking rates

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Speaker 1: because how can they? How can they continue to raise

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Speaker 1: rates when the government is raising this debt like crazy?

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Speaker 1: How can they? And the answer is they can't. And

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Speaker 1: the answer is it looks like they're going to formally

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Speaker 1: announce that they're on hold. The next part is how

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Speaker 1: can they continue to let bonds roll off of their book.

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Speaker 1: How can they continue to sell bonds in the market

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Speaker 1: when there's not enough people buying the bonds that there is.

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Speaker 1: The answer is, I don't really see a way to

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Speaker 1: do that. It looks like the Treasury again in this

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Speaker 1: battle over Fed versus Treasury, it looks like the Treasury

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Speaker 1: has the Fed boxed in right now. They got them

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Speaker 1: kind of painted into a corner, if you will, because

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Speaker 1: if the Fed, the Fed's sort of damned if you do,

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Speaker 1: damn if you don't. If the Fed signals that pause

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Speaker 1: were a pivot, what happens, Well, the equity markets, the

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Speaker 1: risk on assets, the assets are going to go to

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Speaker 1: the moon, and they're trying to avoid that. They're trying

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Speaker 1: to they're trying to bring those down right now. But

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Speaker 1: if they announce this pause or a pivot, they're going

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Speaker 1: to run back up. If the Fed signals or moves

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Speaker 1: right higher, then this is going to hurt the US treasuries,

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Speaker 1: which is going to make it harder for the Treasury

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Speaker 1: to borrow money. But it's already too hard for the

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Speaker 1: Treasure to borrow money. If that happens, then the treasure

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Speaker 1: would collapse under its own weight. For demand. So what

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Speaker 1: do they do? Well, that's a big problem. This is

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Speaker 1: the painted into a corner, if you will. We're stuck

429
00:22:21,040 --> 00:22:24,600
Speaker 1: in this doom loop where if the treasury rates go up,

430
00:22:25,080 --> 00:22:28,080
Speaker 1: So if the FED raises rates, then the interest that

431
00:22:28,119 --> 00:22:30,719
Speaker 1: the Treasury has to pay goes up. If they have

432
00:22:30,760 --> 00:22:33,920
Speaker 1: to pay more interest, then that creates a larger deficit.

433
00:22:34,280 --> 00:22:36,040
Speaker 1: If there's a larger deficit, they have to take on

434
00:22:36,119 --> 00:22:40,160
Speaker 1: more debt. If they take on more debt, then they

435
00:22:40,200 --> 00:22:44,640
Speaker 1: have more long term yields going up, which means even

436
00:22:44,920 --> 00:22:48,640
Speaker 1: larger deficits. And if there's even larger deficits, then they

437
00:22:48,680 --> 00:22:52,359
Speaker 1: need more debt. And this is a vicious cycle, a flywheel.

438
00:22:52,520 --> 00:22:55,480
Speaker 1: We call it the debt death spiral. And so there's

439
00:22:55,520 --> 00:22:57,919
Speaker 1: just no way the FED can absolutely win here. They

440
00:22:57,920 --> 00:23:00,640
Speaker 1: could continue to do that and they could just completely

441
00:23:00,680 --> 00:23:03,520
Speaker 1: destroy the government in the US Treasury, but then there's

442
00:23:03,560 --> 00:23:08,239
Speaker 1: no Fed, and so what can they do? What is

443
00:23:08,280 --> 00:23:10,560
Speaker 1: the likely scenario here? I don't know what's going to

444
00:23:10,600 --> 00:23:12,399
Speaker 1: happen because my crystal ball doesn't work so well. But

445
00:23:12,440 --> 00:23:14,720
Speaker 1: I can tell you what I think is likely to

446
00:23:14,800 --> 00:23:19,240
Speaker 1: happen here based off of history of how the FED works,

447
00:23:19,520 --> 00:23:22,840
Speaker 1: It seems like the FED is usually too slow to respond,

448
00:23:23,359 --> 00:23:25,680
Speaker 1: just like they lowered rates too low and kept them

449
00:23:25,880 --> 00:23:29,240
Speaker 1: at zero through the pandemic and through twenty twenty, and

450
00:23:29,280 --> 00:23:31,760
Speaker 1: then when we saw that inflation was starting to rage on,

451
00:23:31,840 --> 00:23:34,400
Speaker 1: they said, oh, no, inflation is not a problem. Oh,

452
00:23:34,400 --> 00:23:37,240
Speaker 1: inflation is transitory. Oh it's going to go away. And

453
00:23:37,280 --> 00:23:39,320
Speaker 1: they kept rates way too low for way too long.

454
00:23:39,400 --> 00:23:42,040
Speaker 1: And now we're dealing with this problem, and so they'll

455
00:23:42,040 --> 00:23:45,040
Speaker 1: probably keep rates way too high for way too long.

456
00:23:45,119 --> 00:23:48,080
Speaker 1: At this point. They're going to try to manage that,

457
00:23:48,119 --> 00:23:50,640
Speaker 1: but I would expect that these rates will stay way

458
00:23:50,680 --> 00:23:53,320
Speaker 1: too high for too long. In this yield curve, you've

459
00:23:53,320 --> 00:23:56,119
Speaker 1: been hearing about the yield curve in version showing that

460
00:23:56,160 --> 00:23:58,720
Speaker 1: there's a recession coming. And as I've talked about, it's

461
00:23:58,760 --> 00:24:01,240
Speaker 1: not the yield curb inverting, it's the problems when it uninverts,

462
00:24:01,240 --> 00:24:03,840
Speaker 1: and I expect it to uninvert within the next couple

463
00:24:03,920 --> 00:24:08,200
Speaker 1: of months. When that happens, then we'll see the price

464
00:24:08,240 --> 00:24:12,680
Speaker 1: of bonds continue to probably take a massive hit. We're

465
00:24:12,720 --> 00:24:16,040
Speaker 1: going to see a massive flight to hard assets and

466
00:24:16,160 --> 00:24:21,560
Speaker 1: moneies like bitcoin and gold and other anti inflationary assets.

467
00:24:21,560 --> 00:24:24,080
Speaker 1: And I think we're already starting to see this. So,

468
00:24:24,240 --> 00:24:26,480
Speaker 1: for example, I've been talking about I think last week

469
00:24:26,480 --> 00:24:30,000
Speaker 1: we talked about how it's almost sort of a scam.

470
00:24:30,320 --> 00:24:34,760
Speaker 1: We have all the governments, the institutions, the sovereigns are

471
00:24:34,800 --> 00:24:39,080
Speaker 1: having this massive rush to hard assets while you and

472
00:24:39,160 --> 00:24:43,120
Speaker 1: I are being tricked into holding FIAT. You and I

473
00:24:43,200 --> 00:24:46,520
Speaker 1: are being told, oh, there's this big crash coming and

474
00:24:46,600 --> 00:24:49,880
Speaker 1: you want to be in cash right now, we're being

475
00:24:49,920 --> 00:24:54,200
Speaker 1: tricked into buying US dollar nominated assets when everyone else

476
00:24:54,280 --> 00:24:56,080
Speaker 1: is buying hard assets right now. What do I mean

477
00:24:56,119 --> 00:24:58,520
Speaker 1: they're buying hard assets? Well, we talked about this. We

478
00:24:58,560 --> 00:25:01,000
Speaker 1: can see the central banks around the world are net

479
00:25:01,160 --> 00:25:05,760
Speaker 1: sellers of US treasuries. They don't want to hold their surplus.

480
00:25:05,800 --> 00:25:09,480
Speaker 1: Right So, if you're a nation, you export goods and

481
00:25:09,560 --> 00:25:13,520
Speaker 1: you receive back dollars, the difference is your surplus your profit.

482
00:25:14,080 --> 00:25:15,840
Speaker 1: Where do you park that? Where do you park those

483
00:25:15,880 --> 00:25:18,280
Speaker 1: hundreds billions dollars? Well, that typically has been held in

484
00:25:18,400 --> 00:25:22,080
Speaker 1: US treasuries, but that's paper, that's FIAT, and they don't

485
00:25:22,119 --> 00:25:24,240
Speaker 1: want to hold those paper FIAT when they know the

486
00:25:24,280 --> 00:25:27,400
Speaker 1: government is continued to print so much more So that's

487
00:25:27,440 --> 00:25:29,120
Speaker 1: why the central banks around the world have been net

488
00:25:29,240 --> 00:25:31,880
Speaker 1: sellers of US treasuries and what are they buying. They're

489
00:25:31,880 --> 00:25:35,000
Speaker 1: buying hard assets. They've been net buyers of gold, but

490
00:25:35,040 --> 00:25:36,640
Speaker 1: they're not just buying gold. As a matter of fact,

491
00:25:36,680 --> 00:25:40,919
Speaker 1: that Chinese have bought half of all the lithium mines

492
00:25:41,000 --> 00:25:43,320
Speaker 1: in the world, So they want to buy hard assets

493
00:25:43,359 --> 00:25:46,240
Speaker 1: in the ground. We have nations that have assets in

494
00:25:46,280 --> 00:25:49,560
Speaker 1: the ground, like Saudi Arabia and even Russia saying we're

495
00:25:49,600 --> 00:25:51,879
Speaker 1: not going to put out as much oil anymore. We

496
00:25:51,920 --> 00:25:54,840
Speaker 1: would rather hold the oil in the ground than hold

497
00:25:54,840 --> 00:25:59,240
Speaker 1: our surplus in US treasuries. So we're already seeing this

498
00:25:59,400 --> 00:26:04,520
Speaker 1: mad rush USh to these hard assets. Meanwhile, we're watching

499
00:26:04,680 --> 00:26:10,760
Speaker 1: you know, energy assets, hard assets and other assets going

500
00:26:10,800 --> 00:26:14,720
Speaker 1: through the roof, and we're being misled. Now, what I

501
00:26:14,760 --> 00:26:16,320
Speaker 1: want to do is I want to break down the

502
00:26:16,440 --> 00:26:18,520
Speaker 1: three types of assets that we have. I want to

503
00:26:18,520 --> 00:26:20,879
Speaker 1: break them down three different categories so you can you

504
00:26:20,920 --> 00:26:22,919
Speaker 1: can think through how to do this. I want to

505
00:26:22,960 --> 00:26:26,359
Speaker 1: walk you through a mental mindset on how you can

506
00:26:26,920 --> 00:26:31,840
Speaker 1: think through this, how you can prepare your portfolio for

507
00:26:31,960 --> 00:26:33,800
Speaker 1: what I think is coming ahead. Again, like I said,

508
00:26:33,840 --> 00:26:35,280
Speaker 1: my crystal ball is a little foggy, so I don't

509
00:26:35,280 --> 00:26:36,840
Speaker 1: know exactly, but I'm want to walk you through what

510
00:26:36,880 --> 00:26:39,719
Speaker 1: I think is the most possible, the most probable, and

511
00:26:39,800 --> 00:26:43,040
Speaker 1: what I'm doing to position myself for it. How I

512
00:26:43,119 --> 00:26:45,680
Speaker 1: think through that, and how you can do the same,

513
00:26:45,760 --> 00:26:48,439
Speaker 1: and more importantly, what you should be watching so you

514
00:26:48,440 --> 00:26:51,840
Speaker 1: can see how all this unfolds. If you're just tuning in,

515
00:26:51,880 --> 00:26:54,080
Speaker 1: you listening to the Mark mas Show, we're talking about

516
00:26:54,160 --> 00:26:57,320
Speaker 1: how this failed treasury auction is sort of coming to

517
00:26:57,359 --> 00:26:59,480
Speaker 1: a head and where this goes the next ninety days.

518
00:27:00,119 --> 00:27:02,080
Speaker 1: Be aware of this. It's a big deal. I'll be

519
00:27:02,080 --> 00:27:03,600
Speaker 1: back with more in a minute. Don't go away, I'll

520
00:27:03,600 --> 00:27:05,159
Speaker 1: be back, all right, Welcome back. If you just tune in,

521
00:27:05,200 --> 00:27:07,480
Speaker 1: you're listening to the Mark Moss Show, we're talking about

522
00:27:07,760 --> 00:27:10,399
Speaker 1: what the heck happened last week with this almost failed

523
00:27:10,480 --> 00:27:13,080
Speaker 1: US Treasury auction and what this means now I walk

524
00:27:13,119 --> 00:27:15,080
Speaker 1: through all the mechanics of this. I talked about this

525
00:27:15,160 --> 00:27:17,960
Speaker 1: eventual showdown that's coming, and I just don't see any

526
00:27:18,000 --> 00:27:20,520
Speaker 1: way the Fed is able to continue to raise rates

527
00:27:20,560 --> 00:27:25,040
Speaker 1: in this environment and continue to sell off bonds. There's

528
00:27:25,119 --> 00:27:28,679
Speaker 1: just no way unless magically, Well there is a way.

529
00:27:28,720 --> 00:27:31,320
Speaker 1: There's always a way, So what would it take magically

530
00:27:31,680 --> 00:27:35,800
Speaker 1: the US government, the treasury would have to spend equal

531
00:27:35,920 --> 00:27:38,560
Speaker 1: or less than the amount of money they're bringing in. Somehow,

532
00:27:38,560 --> 00:27:41,920
Speaker 1: they'd have to shave about two trillion dollars per year

533
00:27:42,080 --> 00:27:45,080
Speaker 1: off their spending. What would you say The odds of

534
00:27:45,080 --> 00:27:50,119
Speaker 1: that are happening about zero, So that's not going to happen.

535
00:27:50,359 --> 00:27:54,600
Speaker 1: So what happens Well, as we've already talked about, the

536
00:27:55,080 --> 00:27:57,720
Speaker 1: FED mouthpiece Nick Timrose, what we call the Fed Whisper,

537
00:27:58,000 --> 00:28:01,520
Speaker 1: has come out and said that it looks like the

538
00:28:01,520 --> 00:28:05,199
Speaker 1: FED is done hiking rates. At the same time we

539
00:28:05,280 --> 00:28:08,840
Speaker 1: saw this week the new CPI numbers came out, the

540
00:28:08,920 --> 00:28:11,959
Speaker 1: consumer price inflation data came out, and it looks like

541
00:28:12,000 --> 00:28:15,080
Speaker 1: the FED has won the war on inflation. Pretty interesting

542
00:28:15,160 --> 00:28:19,639
Speaker 1: timing for these reports to come out, because the FED

543
00:28:20,080 --> 00:28:22,760
Speaker 1: has to stop tightening, they have to stop raising rates,

544
00:28:22,760 --> 00:28:25,080
Speaker 1: they have to stop still enough bonds, but they can't

545
00:28:25,119 --> 00:28:29,920
Speaker 1: do that if inflation is still raging. So it's pretty

546
00:28:29,920 --> 00:28:33,200
Speaker 1: interesting the new CPI reports come out showing that they've

547
00:28:33,400 --> 00:28:36,560
Speaker 1: basically won the war on inflation at the same time

548
00:28:36,640 --> 00:28:38,960
Speaker 1: that Timrose, the FED Whisper, is coming out and saying

549
00:28:38,960 --> 00:28:41,920
Speaker 1: that they're done again. Like I said, the problem is

550
00:28:41,920 --> 00:28:45,560
Speaker 1: that if the FED comes out and announces a pause

551
00:28:45,840 --> 00:28:48,640
Speaker 1: or a pivot, then we're going to see risk assets

552
00:28:48,800 --> 00:28:52,160
Speaker 1: take off. So don't look for them to come out

553
00:28:52,200 --> 00:28:54,640
Speaker 1: and officially announce it. Instead, it's going to be through

554
00:28:54,720 --> 00:28:58,760
Speaker 1: some stealth ways. So like, for example, the Treasury is

555
00:28:58,800 --> 00:29:02,160
Speaker 1: creating this new funding facility where they're going to buy

556
00:29:02,200 --> 00:29:05,480
Speaker 1: their own bonds, this bond buy back program, and they'll

557
00:29:05,520 --> 00:29:07,600
Speaker 1: buy that. Maybe the FED will give them some money

558
00:29:07,640 --> 00:29:11,160
Speaker 1: off the books. Right, they're going to say this is

559
00:29:11,240 --> 00:29:16,360
Speaker 1: not QE, but it is QI. So technically QE works

560
00:29:16,400 --> 00:29:20,520
Speaker 1: a certain way, it's a certain function, but non technically

561
00:29:21,000 --> 00:29:23,760
Speaker 1: or I guess technically, even though QE has to work

562
00:29:23,800 --> 00:29:26,120
Speaker 1: a certain way, Ultimately, what it does is it adds

563
00:29:26,160 --> 00:29:29,360
Speaker 1: more liquidity to the system. What it also does is

564
00:29:29,400 --> 00:29:32,720
Speaker 1: it shows that the Fed's willingness, the Fed's willingness to

565
00:29:32,920 --> 00:29:35,880
Speaker 1: bail out or fund the liquidity in the system. And

566
00:29:35,960 --> 00:29:38,760
Speaker 1: so whether they don't do it through the exact mechanism

567
00:29:38,840 --> 00:29:41,760
Speaker 1: that's technically called quantitative easing, if they do it a

568
00:29:41,800 --> 00:29:45,000
Speaker 1: certain way, it still achieves the same results. Now, a

569
00:29:45,040 --> 00:29:46,360
Speaker 1: lot of this is what they do through what we

570
00:29:46,400 --> 00:29:48,880
Speaker 1: call job owning, where the Fed's trying to move the

571
00:29:48,920 --> 00:29:51,640
Speaker 1: markets based off of just what they're saying. So they're

572
00:29:51,840 --> 00:29:53,880
Speaker 1: trying to tell you that they'll do something even though

573
00:29:53,880 --> 00:29:56,960
Speaker 1: they haven't, and so we can see that what they

574
00:29:57,080 --> 00:30:00,760
Speaker 1: do has an effect on the markets. Whether it's technically

575
00:30:01,000 --> 00:30:03,920
Speaker 1: quantity of easy or not doesn't really matter. It achieved

576
00:30:03,960 --> 00:30:06,880
Speaker 1: the same result. So that's what we'll see. So for example,

577
00:30:07,920 --> 00:30:10,720
Speaker 1: in March of twenty twenty three, because they had jacked

578
00:30:10,760 --> 00:30:13,160
Speaker 1: up the rates so high, we saw banks starting to fail.

579
00:30:13,400 --> 00:30:17,560
Speaker 1: You remember that, we saw Silicon Valley Bank, We saw

580
00:30:19,600 --> 00:30:21,960
Speaker 1: whatever the banks were, the Felt three banks, some Restronto Banks,

581
00:30:21,960 --> 00:30:25,120
Speaker 1: Silvergate Bank, Silicon Valley Bank, and I think First Republic

582
00:30:25,200 --> 00:30:28,720
Speaker 1: Bank all failed. And what they do well, they created

583
00:30:28,720 --> 00:30:34,640
Speaker 1: a new funny facility called the BTFP and it wasn't QE,

584
00:30:34,920 --> 00:30:38,000
Speaker 1: but it sort of injected a few hundred billion dollars

585
00:30:38,040 --> 00:30:39,760
Speaker 1: liquid into the system to keep the whole thing from

586
00:30:39,800 --> 00:30:42,120
Speaker 1: crashing down. Now, I did a whole video on my

587
00:30:42,160 --> 00:30:45,440
Speaker 1: main YouTube channel breaking this down the difference of how

588
00:30:45,520 --> 00:30:48,520
Speaker 1: the FED functions in the market today and how it's

589
00:30:48,640 --> 00:30:51,440
Speaker 1: changed since two thousand and eight. So I don't have

590
00:30:51,480 --> 00:30:53,520
Speaker 1: it in front of me, but just some basic math

591
00:30:53,760 --> 00:30:57,080
Speaker 1: was in two thousand and eight. We saw the housing

592
00:30:57,160 --> 00:30:59,840
Speaker 1: market actually start melting down in two thousand and six.

593
00:31:00,320 --> 00:31:02,680
Speaker 1: So in two thousand and six we saw building permits,

594
00:31:02,680 --> 00:31:05,520
Speaker 1: which is a leading indicator. If you're not pulling building permits,

595
00:31:05,520 --> 00:31:07,400
Speaker 1: then you're not going to be building in the future, obviously,

596
00:31:08,360 --> 00:31:12,080
Speaker 1: and we saw those drop by twenty six percent in

597
00:31:12,120 --> 00:31:13,880
Speaker 1: two thousand and six. But yet they didn't do anything.

598
00:31:15,360 --> 00:31:18,480
Speaker 1: It took about like a year and a half before

599
00:31:18,520 --> 00:31:21,360
Speaker 1: they started to like lower rates. The trigger for the

600
00:31:21,400 --> 00:31:23,920
Speaker 1: great financial crash in two thousand and eight was really

601
00:31:24,040 --> 00:31:27,840
Speaker 1: bear Stearns going bankrupt, and it took them, I want

602
00:31:27,880 --> 00:31:31,560
Speaker 1: to say, was it about eight or nine months before

603
00:31:31,640 --> 00:31:33,960
Speaker 1: they did anything, and they organized a baillout of like

604
00:31:34,000 --> 00:31:36,200
Speaker 1: one hundred million dollars, so it took eight or nine months.

605
00:31:36,200 --> 00:31:39,080
Speaker 1: Now fast forward and look at this in twenty twenty three,

606
00:31:39,480 --> 00:31:43,959
Speaker 1: when the banks failed, within six days they moved up.

607
00:31:44,280 --> 00:31:46,400
Speaker 1: They moved and had this money set up, this funding

608
00:31:46,400 --> 00:31:48,640
Speaker 1: and fifth fully set up. So they went from taking

609
00:31:48,800 --> 00:31:52,040
Speaker 1: you know, seven eight months to now taking six days.

610
00:31:52,160 --> 00:31:54,360
Speaker 1: So it shows the willingness of them to act. In

611
00:31:54,400 --> 00:31:57,160
Speaker 1: twenty twenty we saw them instantly moving to the markets

612
00:31:57,200 --> 00:32:00,560
Speaker 1: and set up multiple funding facilities. In fact, I think

613
00:32:00,560 --> 00:32:05,120
Speaker 1: there was thirteen funding facilities. They were actively buying even

614
00:32:05,320 --> 00:32:08,080
Speaker 1: stocks into the market. They were buying bonds, they're buying

615
00:32:08,080 --> 00:32:11,560
Speaker 1: mortgage backed securities, they're buying all these things. Then they

616
00:32:11,560 --> 00:32:14,640
Speaker 1: even went a step further and they started setting up

617
00:32:14,680 --> 00:32:18,040
Speaker 1: dollar swap lines. So now all the other banks around

618
00:32:18,080 --> 00:32:20,560
Speaker 1: the world will give you money as well. Think of

619
00:32:20,600 --> 00:32:23,200
Speaker 1: this as like credit cards. Think about if the banks

620
00:32:23,960 --> 00:32:27,200
Speaker 1: just sent you out, like, hey, here's five new credit cards.

621
00:32:27,920 --> 00:32:29,880
Speaker 1: If anything were to happen to you where you know,

622
00:32:29,920 --> 00:32:31,880
Speaker 1: you can't make your car payment, your house payment, whatever,

623
00:32:32,000 --> 00:32:33,400
Speaker 1: just put it on the credit card, no big deal.

624
00:32:34,320 --> 00:32:36,160
Speaker 1: If they would just send us all out, you know,

625
00:32:37,160 --> 00:32:38,880
Speaker 1: one hundred thousand dollars in credit cards that we could

626
00:32:38,880 --> 00:32:41,840
Speaker 1: just use if we needed, that would probably insulate us

627
00:32:41,840 --> 00:32:43,720
Speaker 1: so we wouldn't have this recession. And that's exactly what

628
00:32:43,760 --> 00:32:47,280
Speaker 1: they've done. They went around and gaven all these swap

629
00:32:47,280 --> 00:32:49,480
Speaker 1: lines out to all these banks. Now it's not just

630
00:32:49,560 --> 00:32:52,680
Speaker 1: the friendly nations. I think there's about thirteen nations or

631
00:32:52,680 --> 00:32:54,280
Speaker 1: I should say central banks that we have these open

632
00:32:54,320 --> 00:32:56,120
Speaker 1: with at the same time. And so we've seen this

633
00:32:56,280 --> 00:32:59,920
Speaker 1: fundamental transformation of how these central banks work in the markets,

634
00:33:00,240 --> 00:33:02,440
Speaker 1: and not just how they work, but even the speed

635
00:33:02,560 --> 00:33:04,760
Speaker 1: and timing of how they work. And so they've gone

636
00:33:04,760 --> 00:33:08,800
Speaker 1: from this sort of reactive lagging approach to now a

637
00:33:09,040 --> 00:33:13,800
Speaker 1: pre emptive moving in advance to prevent these things from happening.

638
00:33:14,400 --> 00:33:19,520
Speaker 1: And so my base case is that we have massive

639
00:33:19,520 --> 00:33:22,320
Speaker 1: amounts of inflation in front of us. My base case

640
00:33:22,440 --> 00:33:25,640
Speaker 1: is that we do not have a deflationary crash where

641
00:33:25,640 --> 00:33:27,800
Speaker 1: everything falls in half and home prices are worth fifty

642
00:33:27,800 --> 00:33:30,200
Speaker 1: percent and stocks worth fifty percent. I believe we have

643
00:33:30,240 --> 00:33:34,480
Speaker 1: an inflationary crash. Now. Either way, a crash is bad. Right.

644
00:33:34,680 --> 00:33:37,640
Speaker 1: A crash is bad because prices will move up more

645
00:33:37,680 --> 00:33:41,440
Speaker 1: than an income and we won't have enough money to

646
00:33:41,520 --> 00:33:43,000
Speaker 1: pay for the things that we want to maintain our

647
00:33:43,040 --> 00:33:45,560
Speaker 1: quality of life. So if you lose your job, your

648
00:33:45,640 --> 00:33:47,040
Speaker 1: quality of life goes down because you can't buy the

649
00:33:47,080 --> 00:33:48,520
Speaker 1: same things, or you get a lower paying job, you

650
00:33:48,560 --> 00:33:50,720
Speaker 1: can't buy the same things. But if prices go up,

651
00:33:50,840 --> 00:33:52,600
Speaker 1: you're also in the same boat. You could still have

652
00:33:52,640 --> 00:33:54,920
Speaker 1: your same job, but prices have gone up so much

653
00:33:54,920 --> 00:33:58,120
Speaker 1: you can't afford those things. See, either way, a deflationary

654
00:33:58,200 --> 00:34:01,960
Speaker 1: or inflationary crash is bad. I'm expecting an inflationary crash. Now,

655
00:34:02,280 --> 00:34:06,240
Speaker 1: could there be a deflationary crash? First? There certainly could be,

656
00:34:06,280 --> 00:34:09,120
Speaker 1: And this is what most people think. So even the

657
00:34:09,120 --> 00:34:11,239
Speaker 1: Harry Dents and the leaderships of the world think that

658
00:34:11,280 --> 00:34:13,399
Speaker 1: we'll have this big crash he's calling Harry dentis calling

659
00:34:13,440 --> 00:34:17,000
Speaker 1: for an eighty percent market crash, and then he thinks

660
00:34:17,000 --> 00:34:18,880
Speaker 1: that the FED will come in and blow this sky high.

661
00:34:19,040 --> 00:34:21,319
Speaker 1: I don't think that's That's not my base case. It's

662
00:34:21,360 --> 00:34:23,200
Speaker 1: certainly possible. I'm not putting that out of the realm

663
00:34:23,200 --> 00:34:26,120
Speaker 1: with possibility. It's certainly possible. I don't think that's the

664
00:34:26,120 --> 00:34:29,000
Speaker 1: most probable scenario of my case. I think we sort

665
00:34:29,040 --> 00:34:32,040
Speaker 1: of just continue to trudge along, continue to move sideways,

666
00:34:32,080 --> 00:34:34,279
Speaker 1: chop back and forth. We see a lot of volatility.

667
00:34:34,760 --> 00:34:38,480
Speaker 1: Potentially we see some big swings, some ten to fifteen

668
00:34:38,520 --> 00:34:43,480
Speaker 1: percent swings. I don't think we see the sixty eighty

669
00:34:43,520 --> 00:34:46,320
Speaker 1: percent like Harry Dent says, and I believe that will

670
00:34:46,360 --> 00:34:48,719
Speaker 1: cause the FED to blow this sky high. Now, going

671
00:34:48,760 --> 00:34:50,480
Speaker 1: back to charting this since two thousand and eight, we

672
00:34:50,520 --> 00:34:53,080
Speaker 1: saw that the FED intervening in the market to tune

673
00:34:53,120 --> 00:34:55,439
Speaker 1: of about one point two trillion dollars. It's about seven

674
00:34:56,080 --> 00:34:59,800
Speaker 1: eight hundred billion roughly the first bellout package total amount

675
00:34:59,800 --> 00:35:01,919
Speaker 1: of one point two billion in two thousand and eight,

676
00:35:02,320 --> 00:35:04,239
Speaker 1: and it took the markets. The market's dropped sm P

677
00:35:04,280 --> 00:35:06,640
Speaker 1: five hundred dropped about sixty percent and took about seven

678
00:35:06,719 --> 00:35:10,279
Speaker 1: years to recover its high. In twenty twenty, because the

679
00:35:10,280 --> 00:35:12,839
Speaker 1: FED moved so fast, the market didn't drop sixty percent

680
00:35:12,880 --> 00:35:15,719
Speaker 1: and only dropped thirty percent, dropped half as much and

681
00:35:15,719 --> 00:35:19,040
Speaker 1: instead of taking seven six seven years to recover, it

682
00:35:19,040 --> 00:35:22,040
Speaker 1: took six or seven months to recover. You seeing how

683
00:35:22,080 --> 00:35:24,120
Speaker 1: they changed the way they interacted to the market, and

684
00:35:24,160 --> 00:35:26,480
Speaker 1: the market didn't fall as far and it recovered much faster.

685
00:35:27,719 --> 00:35:29,680
Speaker 1: It was to the tune of about ten trillion. Instead

686
00:35:29,719 --> 00:35:32,120
Speaker 1: of one trillion, it was ten trillion. I believe that

687
00:35:32,160 --> 00:35:34,000
Speaker 1: the FED will have to intervene, probably to the tune

688
00:35:34,000 --> 00:35:36,560
Speaker 1: of fifteen to twenty trillion, and so instead of a

689
00:35:36,560 --> 00:35:38,720
Speaker 1: thirty percent drop, maye we'll see a fifteen percent drop.

690
00:35:39,840 --> 00:35:43,239
Speaker 1: But it's what happens after that, you see. After two

691
00:35:43,239 --> 00:35:46,280
Speaker 1: thousand and eight, stocks gold went on to make crazy

692
00:35:46,360 --> 00:35:49,520
Speaker 1: knew all time highs. After twenty twenty, stocks went on

693
00:35:49,560 --> 00:35:51,799
Speaker 1: to make even crazier a new toime all time Hyes,

694
00:35:52,239 --> 00:35:55,000
Speaker 1: risk assets like bitcoin et cetera. And I leave in

695
00:35:55,000 --> 00:35:57,640
Speaker 1: twenty twenty four. If this happens, it'll be the same thing.

696
00:35:58,440 --> 00:36:00,399
Speaker 1: I don't know what happens in the next to nine

697
00:36:00,440 --> 00:36:04,000
Speaker 1: months or twelve months. I firmly believe that in the

698
00:36:04,040 --> 00:36:07,360
Speaker 1: next three to five years, home prices are up fifty percent,

699
00:36:08,239 --> 00:36:11,520
Speaker 1: gasoline prices, food prices, all those prices are fifty percent.

700
00:36:11,520 --> 00:36:14,400
Speaker 1: Bick Wind's up to three hundred percent. That's what I

701
00:36:14,440 --> 00:36:16,200
Speaker 1: think happens now between now and then. I don't know.

702
00:36:16,280 --> 00:36:19,560
Speaker 1: It's anybody's guess. Potentially, there's so many black swans out

703
00:36:19,600 --> 00:36:22,200
Speaker 1: there that this could catch the FED off guard, but

704
00:36:22,239 --> 00:36:23,960
Speaker 1: it looks to me like they're preempting it, and we're

705
00:36:24,000 --> 00:36:27,120
Speaker 1: seeing it from the Treasury announcement right here. Anyway, you

706
00:36:27,160 --> 00:36:29,160
Speaker 1: listen to the Mark Mas Show breaking down this FED

707
00:36:29,160 --> 00:36:31,600
Speaker 1: Treasury auction, what happened, and what I think happens in

708
00:36:31,600 --> 00:36:34,160
Speaker 1: the future. That's what I got for you today. Hopefully

709
00:36:34,200 --> 00:36:35,760
Speaker 1: have enjoyed this. Leave me a review on the podcast

710
00:36:35,760 --> 00:36:38,160
Speaker 1: if you're listening, And that's what I got. Until next time,