1 00:00:00,080 --> 00:00:03,200 Speaker 1: The Federal Reserve just came out with its latest announcement 2 00:00:03,240 --> 00:00:07,200 Speaker 1: that holds the keys to your financial future. Jerome Powell 3 00:00:07,520 --> 00:00:11,600 Speaker 1: had his big meeting and understanding what he said, holds 4 00:00:11,600 --> 00:00:14,760 Speaker 1: the keys to determine if your business will survive or thrive, 5 00:00:15,120 --> 00:00:16,800 Speaker 1: if your job will pay you more or you'll be 6 00:00:16,880 --> 00:00:20,720 Speaker 1: on the unemployment line, and ultimately, what's your assets, your 7 00:00:20,760 --> 00:00:23,840 Speaker 1: home price, and your retirement looks like in the long run. 8 00:00:24,160 --> 00:00:27,400 Speaker 1: It's pretty insane when you think about what is going on. 9 00:00:27,800 --> 00:00:29,480 Speaker 1: But this is the world that we live in now. 10 00:00:29,480 --> 00:00:30,840 Speaker 1: Before I dig into that, if you just tune in, 11 00:00:30,920 --> 00:00:33,040 Speaker 1: you're listening to the Mark Moss Show. I talk about 12 00:00:33,040 --> 00:00:37,200 Speaker 1: the way the world is changing, breaking apart into globe deglobalization, 13 00:00:37,280 --> 00:00:39,880 Speaker 1: and we look at it through the lens of politics, finance, 14 00:00:40,000 --> 00:00:43,680 Speaker 1: and technology. Today we're looking at mostly the financial side, 15 00:00:43,720 --> 00:00:46,640 Speaker 1: maybe a little bit of the political decisioning as to 16 00:00:46,760 --> 00:00:52,040 Speaker 1: what is driving this financial movement. And unfortunately, we're forced 17 00:00:52,080 --> 00:00:54,800 Speaker 1: to understand this, We're forced to pay attention, and we're 18 00:00:54,800 --> 00:00:57,480 Speaker 1: forced to take action on this, or we can choose 19 00:00:57,480 --> 00:00:59,360 Speaker 1: to put our head in the stand and ignore it. However, 20 00:01:00,120 --> 00:01:02,400 Speaker 1: say that an ostrich can put its head in the sand. 21 00:01:02,400 --> 00:01:05,440 Speaker 1: But it doesn't keep it from being eaten. One of 22 00:01:05,440 --> 00:01:07,520 Speaker 1: my favorite authors, Ian Ran would say that you can 23 00:01:07,640 --> 00:01:11,160 Speaker 1: choose to ignore reality, but you can't ignore the consequences 24 00:01:11,200 --> 00:01:14,480 Speaker 1: of reality. Now, my story goes that, you know, I 25 00:01:14,520 --> 00:01:16,320 Speaker 1: got out of high school, I started buying bank owned 26 00:01:16,319 --> 00:01:18,480 Speaker 1: properties right off the bat, fixed and flipped a bunch 27 00:01:18,480 --> 00:01:20,560 Speaker 1: of properties, built up a whole bunch of properties, sold 28 00:01:20,600 --> 00:01:24,280 Speaker 1: a couple of businesses, and I was basically retired. And 29 00:01:24,319 --> 00:01:26,080 Speaker 1: then two thousand and eight came and wiped me out. 30 00:01:26,120 --> 00:01:28,039 Speaker 1: And part of the reason why is I was so 31 00:01:28,240 --> 00:01:31,479 Speaker 1: focused on making money. I was really good at building 32 00:01:31,560 --> 00:01:34,480 Speaker 1: businesses and exits and making money that way. But I 33 00:01:34,560 --> 00:01:37,680 Speaker 1: wasn't paying attention to the business cycle, the debt cycles, 34 00:01:37,720 --> 00:01:39,520 Speaker 1: and what the Federal Reserve was doing. It wasn't even 35 00:01:39,520 --> 00:01:41,520 Speaker 1: on my radar. I didn't know about the Federal Reserve. 36 00:01:41,520 --> 00:01:43,480 Speaker 1: I didn't I knew about it. I didn't think about it. 37 00:01:44,680 --> 00:01:47,920 Speaker 1: But unfortunately, my head was in the sand, and unfortunately 38 00:01:48,440 --> 00:01:51,040 Speaker 1: the games that Wall Street played with the Federal Reserve 39 00:01:51,120 --> 00:01:53,640 Speaker 1: did pumping up the housing market. The games that Wall 40 00:01:53,680 --> 00:01:57,160 Speaker 1: Street played had an effect on my life. They hate 41 00:01:57,160 --> 00:01:58,800 Speaker 1: me even though my head was in the sand, and 42 00:01:58,840 --> 00:02:01,160 Speaker 1: so I've sort of made it my mission ever since 43 00:02:01,200 --> 00:02:03,920 Speaker 1: then to understand first of all, what was going on. 44 00:02:03,960 --> 00:02:05,560 Speaker 1: And for the last five six years now, I've been 45 00:02:05,640 --> 00:02:07,320 Speaker 1: talking to you about what is going on so you 46 00:02:07,400 --> 00:02:09,800 Speaker 1: don't suffer the same fate that I did. And so 47 00:02:09,840 --> 00:02:11,840 Speaker 1: we have to look at this. Shout out to Ron 48 00:02:11,880 --> 00:02:13,880 Speaker 1: Paul who sort of led the charge on in the FED, 49 00:02:13,919 --> 00:02:15,280 Speaker 1: in the FED and the FED that put a lot 50 00:02:15,320 --> 00:02:18,520 Speaker 1: of attention on the FED. And here we are looking 51 00:02:18,560 --> 00:02:20,280 Speaker 1: and talking about the FED. So I'm going to break 52 00:02:20,280 --> 00:02:23,800 Speaker 1: down what the FED just did and it sort of 53 00:02:23,840 --> 00:02:25,560 Speaker 1: sent the markets into a little bit of a tail spin, 54 00:02:25,720 --> 00:02:27,440 Speaker 1: although they appear to be coming out of it now. 55 00:02:27,720 --> 00:02:30,480 Speaker 1: But I want to talk about, regardless of what happens 56 00:02:30,760 --> 00:02:34,760 Speaker 1: this month or next month, we understand what is going 57 00:02:34,800 --> 00:02:37,960 Speaker 1: to happen because there's such thing as true constraints. I'm 58 00:02:37,960 --> 00:02:40,680 Speaker 1: going to break down what these true constraints are. Why 59 00:02:41,200 --> 00:02:44,240 Speaker 1: there's a there's a wall, there's a wall they can't 60 00:02:44,240 --> 00:02:47,840 Speaker 1: get through. Now, there's some limited flexibility within those walls, 61 00:02:47,840 --> 00:02:49,960 Speaker 1: which is where we see them operating today, but the 62 00:02:50,000 --> 00:02:51,520 Speaker 1: walls are there. We're gonna break down that, and then 63 00:02:51,520 --> 00:02:54,720 Speaker 1: we're going to talk about why the Federal Reserve and 64 00:02:54,760 --> 00:02:57,280 Speaker 1: the US Treasury are fighting as opposed to working together, 65 00:02:57,320 --> 00:03:00,440 Speaker 1: and ultimately how the Treasury is forcing their hand into 66 00:03:00,480 --> 00:03:02,399 Speaker 1: action in a way they don't want to go. We're 67 00:03:02,400 --> 00:03:05,000 Speaker 1: going to break all that down now to break to 68 00:03:05,080 --> 00:03:07,880 Speaker 1: kind of kick this off, let's just talk about the 69 00:03:08,040 --> 00:03:11,000 Speaker 1: fo MC meeting. That is the meaning where the Jerome 70 00:03:11,040 --> 00:03:13,240 Speaker 1: Palle ahead of the rowerser comes out and basically again 71 00:03:13,480 --> 00:03:16,360 Speaker 1: tells us our fate, sort of like what is that 72 00:03:16,440 --> 00:03:18,880 Speaker 1: Groundhog Day where everybody watches TV. Does he punks the 73 00:03:18,960 --> 00:03:21,720 Speaker 1: Tony phil the groundhog? If he comes out and if 74 00:03:21,720 --> 00:03:23,400 Speaker 1: he sees his shadow one way or the other, it 75 00:03:23,440 --> 00:03:25,720 Speaker 1: tells us spring is coming or spring's delayed or something 76 00:03:25,760 --> 00:03:28,079 Speaker 1: like that. I've never really bought into it too much. 77 00:03:28,080 --> 00:03:30,440 Speaker 1: I remember the movie Groundhog Day, but that's sort of 78 00:03:30,480 --> 00:03:32,720 Speaker 1: what we see. We see Jerome Powell come out, and 79 00:03:32,800 --> 00:03:35,280 Speaker 1: does he see his own shadow? And will we be 80 00:03:35,320 --> 00:03:38,360 Speaker 1: in winter longer than we expected? Will we be in 81 00:03:38,400 --> 00:03:42,120 Speaker 1: a quantitative tightening cycle longer than we expected? Or will 82 00:03:42,120 --> 00:03:44,200 Speaker 1: he bring spring back and go back into a quantitative 83 00:03:44,280 --> 00:03:48,240 Speaker 1: easing cycle, ease monetary policy and allow things to flourish again. 84 00:03:48,320 --> 00:03:50,480 Speaker 1: You can think about the tightening and the easing sort 85 00:03:50,480 --> 00:03:52,800 Speaker 1: of like the winter in the summer. This is the spring, right, 86 00:03:53,160 --> 00:03:56,760 Speaker 1: and so that's sort of what we saw. Now. The 87 00:03:56,800 --> 00:04:00,480 Speaker 1: market has been predicting that we would see six rate cuts, 88 00:04:00,520 --> 00:04:04,200 Speaker 1: the FED lowering rates, making the price of money cheaper 89 00:04:04,680 --> 00:04:08,160 Speaker 1: six times in twenty twenty four. The Federal Reserve Drome 90 00:04:08,200 --> 00:04:09,760 Speaker 1: pal has been saying, no, no, no, no, you guys 91 00:04:09,760 --> 00:04:13,000 Speaker 1: are wrong. It's only going to be three. Now, I 92 00:04:13,120 --> 00:04:15,800 Speaker 1: am saying, what difference does it make if it's three 93 00:04:15,920 --> 00:04:20,240 Speaker 1: or six? What ultimately matters is the total amount of movement, 94 00:04:20,560 --> 00:04:22,680 Speaker 1: Meaning do we get a point and a half of 95 00:04:22,800 --> 00:04:25,560 Speaker 1: movement this year? And if we get a point and 96 00:04:25,560 --> 00:04:27,880 Speaker 1: a half, does it come through three half point moves 97 00:04:28,080 --> 00:04:31,080 Speaker 1: or does it come from six quarter point moves or 98 00:04:31,120 --> 00:04:34,760 Speaker 1: whatever the math is on that, And that doesn't really matter, right, 99 00:04:34,800 --> 00:04:38,800 Speaker 1: it's the overall size of the move now if they 100 00:04:38,960 --> 00:04:41,240 Speaker 1: move slower, And this is exactly what happened in the 101 00:04:41,240 --> 00:04:44,159 Speaker 1: media esterday, Jerome Palace sort of came out and he 102 00:04:44,200 --> 00:04:46,080 Speaker 1: did what we call FED speak or what we call 103 00:04:46,240 --> 00:04:50,000 Speaker 1: jab owning the market through talking, he's influencing, he's moving 104 00:04:50,040 --> 00:04:52,920 Speaker 1: the markets based off of this, and so he's saying 105 00:04:52,960 --> 00:04:54,360 Speaker 1: we're going to do less. The market is saying we're 106 00:04:54,360 --> 00:04:58,400 Speaker 1: going to do more, and after being very dubvish, meaning 107 00:04:58,720 --> 00:05:01,680 Speaker 1: sort of signaling that they're going to be easy in 108 00:05:01,720 --> 00:05:04,480 Speaker 1: monetary policy. In December, the markets have been taking off. 109 00:05:04,800 --> 00:05:07,240 Speaker 1: The real estate market took off, the stock markets are 110 00:05:07,240 --> 00:05:09,880 Speaker 1: doing good, bitcoins holding up, oil, all of these things. 111 00:05:09,880 --> 00:05:12,839 Speaker 1: Gold is doing great. And I think the market started 112 00:05:12,839 --> 00:05:16,040 Speaker 1: getting too far ahead of itself. And so Jerome Powell again, 113 00:05:16,279 --> 00:05:20,040 Speaker 1: the job owning isn't always doing something. A lot of 114 00:05:20,080 --> 00:05:22,960 Speaker 1: times it's just saying something. We can look back to 115 00:05:23,000 --> 00:05:26,080 Speaker 1: October when they really talk the market down. So they 116 00:05:26,080 --> 00:05:29,360 Speaker 1: started talking about how they've done enough, how they're going 117 00:05:29,400 --> 00:05:31,719 Speaker 1: to start easing, and just off of that talk, it 118 00:05:31,839 --> 00:05:33,839 Speaker 1: pushed the market into rally into the end of the year. 119 00:05:34,480 --> 00:05:36,679 Speaker 1: Then the markets started getting too far ahead of itself. 120 00:05:37,400 --> 00:05:40,520 Speaker 1: Too much asset price inflation. People are spending too much money, 121 00:05:40,560 --> 00:05:42,719 Speaker 1: as known as the wealth effect. Right when your house 122 00:05:42,760 --> 00:05:45,080 Speaker 1: goes up in value, when your stock account, your retirement 123 00:05:45,080 --> 00:05:48,560 Speaker 1: account goes up in value, you feel more wealthy, you 124 00:05:48,600 --> 00:05:50,960 Speaker 1: feel more optimistic about your future. When that happens, you 125 00:05:51,000 --> 00:05:54,040 Speaker 1: spend more money, You go out to the nery book davocation. Likewise, 126 00:05:54,080 --> 00:05:56,880 Speaker 1: the opposite happens. When your house loses value, your stocks 127 00:05:56,920 --> 00:05:59,520 Speaker 1: lose value, things like that, you feel more broke. Even 128 00:05:59,560 --> 00:06:02,640 Speaker 1: though you don't need that money for decades, potentially, you 129 00:06:02,720 --> 00:06:05,120 Speaker 1: still feel more broke. You still feel more pessimistic, and 130 00:06:05,160 --> 00:06:08,080 Speaker 1: then you naturally spend less money. And so the FED 131 00:06:08,120 --> 00:06:09,880 Speaker 1: has been trying to fight inflation, and so they're trying 132 00:06:09,920 --> 00:06:12,880 Speaker 1: to control us and not allow us to spend too 133 00:06:12,960 --> 00:06:15,080 Speaker 1: much money to push inflation up. But at the same 134 00:06:15,160 --> 00:06:17,760 Speaker 1: time they're trying to walk this thin line of not 135 00:06:17,880 --> 00:06:20,599 Speaker 1: crashing the market. So that's where they're operating. These are 136 00:06:20,640 --> 00:06:24,960 Speaker 1: the constraints they're operating between one not letting the over 137 00:06:25,040 --> 00:06:27,080 Speaker 1: exuberance and people driving the market back up, but at 138 00:06:27,080 --> 00:06:29,839 Speaker 1: the same time not pessimism and then pushing the market 139 00:06:29,839 --> 00:06:33,160 Speaker 1: back down. Pushing the market down would be deflation at 140 00:06:33,279 --> 00:06:36,080 Speaker 1: price going up are inflation. That's the battle lines. These 141 00:06:36,080 --> 00:06:39,080 Speaker 1: are the walls that they're playing within. The problem is 142 00:06:40,120 --> 00:06:43,839 Speaker 1: they have natural constraints, and the natural constraints are really 143 00:06:43,960 --> 00:06:49,520 Speaker 1: lined out between the battle that's being fought right now, Wager, 144 00:06:49,720 --> 00:06:52,000 Speaker 1: the war that's being fought between Janet Yellen at the 145 00:06:52,080 --> 00:06:54,760 Speaker 1: US Treasury and Rome Power at the Federal reserve. I've 146 00:06:54,760 --> 00:06:57,280 Speaker 1: talked about this extensively on my main YouTube channel, Mark Moss. 147 00:06:57,960 --> 00:07:00,240 Speaker 1: If you watch that. If you don't watch it, video 148 00:07:00,279 --> 00:07:02,040 Speaker 1: should go check it out Mark Moss. You can just 149 00:07:02,080 --> 00:07:04,840 Speaker 1: search Mark Moss. FED in the Treasury fighting each other. 150 00:07:05,400 --> 00:07:08,000 Speaker 1: But this is all playing out right now. I want 151 00:07:08,040 --> 00:07:10,920 Speaker 1: to lay out sort of what these true constraints are 152 00:07:11,160 --> 00:07:12,720 Speaker 1: so you can sort of understand this. Then we're going 153 00:07:12,760 --> 00:07:15,000 Speaker 1: to talk about how the Treasury is forcing the Fed 154 00:07:15,080 --> 00:07:18,240 Speaker 1: into action that they don't want. Before we talk about 155 00:07:18,400 --> 00:07:20,800 Speaker 1: forcing their action, let's just talk about what these true 156 00:07:20,880 --> 00:07:23,640 Speaker 1: constraints are. So we've heard a lot as the FED 157 00:07:23,720 --> 00:07:26,840 Speaker 1: went on the fastest rate hiking cycle in history, a 158 00:07:26,880 --> 00:07:28,440 Speaker 1: lot of people would say that, well, they're going to 159 00:07:28,520 --> 00:07:30,680 Speaker 1: raise rates until they break something. So what does that 160 00:07:30,840 --> 00:07:33,120 Speaker 1: mean till they break something? Well, there's lots of things 161 00:07:33,200 --> 00:07:36,520 Speaker 1: that could break. So, for example, as the FED raised 162 00:07:36,720 --> 00:07:39,440 Speaker 1: rates at the fastest rate in history, that made the 163 00:07:39,520 --> 00:07:42,400 Speaker 1: price of money more expensive. It made the bonds or 164 00:07:42,440 --> 00:07:46,240 Speaker 1: the debt worth less, and so we saw banks start collapsing. 165 00:07:46,800 --> 00:07:49,559 Speaker 1: In March of twenty twenty three, we saw three banks 166 00:07:49,600 --> 00:07:52,960 Speaker 1: collapse in a matter of weeks or days. As a 167 00:07:53,040 --> 00:07:55,080 Speaker 1: matter of fact, totally more than the bank collapse in 168 00:07:55,120 --> 00:07:57,920 Speaker 1: two thousand and eight and the FED was forced to 169 00:07:58,080 --> 00:08:02,080 Speaker 1: start easy. Now, technically they stayed in quantitative tightening, although 170 00:08:02,120 --> 00:08:05,160 Speaker 1: they were easing by adding liquidity to the market. Now, 171 00:08:05,240 --> 00:08:06,600 Speaker 1: this is the point that I really want to hit 172 00:08:06,720 --> 00:08:09,160 Speaker 1: on here for a second. Pay attention to this because 173 00:08:09,760 --> 00:08:13,040 Speaker 1: you have to understand the difference of doing something and 174 00:08:13,720 --> 00:08:16,080 Speaker 1: doing something. What do I mean by that? A lot 175 00:08:16,160 --> 00:08:20,000 Speaker 1: of very smart analysts and honestly smarter than I am, 176 00:08:20,440 --> 00:08:24,640 Speaker 1: that understand the inner workings and plumbing of the financial markets, 177 00:08:24,640 --> 00:08:26,800 Speaker 1: which are very complex, way too complex in my opinion, 178 00:08:26,840 --> 00:08:29,520 Speaker 1: they shouldn't be that way. They understand it better. However, 179 00:08:30,280 --> 00:08:34,000 Speaker 1: they get too technical, and I believe they're factually correct, 180 00:08:34,320 --> 00:08:38,240 Speaker 1: but intellectually dishonest. What does that mean? They're factually correct, 181 00:08:38,280 --> 00:08:41,559 Speaker 1: they're going to say, well, look, the markets went up 182 00:08:41,880 --> 00:08:45,760 Speaker 1: and caused inflation, but the FED didn't do anything, meaning 183 00:08:45,880 --> 00:08:49,880 Speaker 1: they didn't lower rates, they didn't inject money, and so 184 00:08:50,200 --> 00:08:55,480 Speaker 1: factually they're correct. Technically, however, it's intellectually dishonest because by 185 00:08:55,559 --> 00:08:58,160 Speaker 1: them saying they were going to do something, by them signaling, 186 00:08:58,240 --> 00:09:00,599 Speaker 1: by them being more dubvish in their comments, that was 187 00:09:00,800 --> 00:09:03,360 Speaker 1: enough to move the market. So technically they're correct. They 188 00:09:03,440 --> 00:09:07,160 Speaker 1: didn't actually do something as far as the policy, but 189 00:09:07,320 --> 00:09:12,040 Speaker 1: they're talking their opinions. Their dubbish sentiment statements were enough 190 00:09:12,080 --> 00:09:14,839 Speaker 1: to move the market. And so you have to understand this. 191 00:09:16,480 --> 00:09:18,640 Speaker 1: Just talking again back to the job on is enough. 192 00:09:18,720 --> 00:09:22,800 Speaker 1: The other reason why it's intellectually dishonest. Well, I gotta 193 00:09:22,800 --> 00:09:24,439 Speaker 1: take a very quick break. I'll tell you whant to 194 00:09:24,480 --> 00:09:25,959 Speaker 1: come back. If you just tune in, you listen to 195 00:09:26,080 --> 00:09:28,920 Speaker 1: the Mark Mass Show talking about the fight between the 196 00:09:29,000 --> 00:09:30,880 Speaker 1: Treasury and the Fed and how it's going to play 197 00:09:30,880 --> 00:09:32,079 Speaker 1: out and what you should be doing about it. Don't 198 00:09:32,080 --> 00:09:37,080 Speaker 1: go away. I'll be back with more a minute. All right, 199 00:09:37,080 --> 00:09:38,679 Speaker 1: welcome back. If you're just tuned innial listening to the 200 00:09:38,720 --> 00:09:40,719 Speaker 1: Mark Mass Show, we're talking about the battle between the 201 00:09:40,880 --> 00:09:43,880 Speaker 1: Fed and the Treasury. I know they're both part of 202 00:09:43,920 --> 00:09:46,280 Speaker 1: the US government, right, they should probably be getting along, 203 00:09:46,440 --> 00:09:48,960 Speaker 1: but they're not. The reason why they're not is because 204 00:09:49,040 --> 00:09:52,000 Speaker 1: they have different agendas. Before we get into what the 205 00:09:52,000 --> 00:09:53,520 Speaker 1: different agendas are, I want to go back to the 206 00:09:53,559 --> 00:09:55,520 Speaker 1: point I was making before the commercial break, which is 207 00:09:56,040 --> 00:10:00,240 Speaker 1: why a lot of these very smart analysts are factually correct, 208 00:10:00,320 --> 00:10:03,600 Speaker 1: technically correct but intellectually dishonest. So he talked about how 209 00:10:03,800 --> 00:10:05,200 Speaker 1: they'll say, well, they didn't do anything. The didn't they 210 00:10:05,200 --> 00:10:08,520 Speaker 1: didn't change rate policy, they didn't increase liquidity, so didn't 211 00:10:08,520 --> 00:10:11,280 Speaker 1: do anything. But just their sentiment, just what they said, 212 00:10:11,480 --> 00:10:14,800 Speaker 1: does it matters a lot, as we saw in October, 213 00:10:14,840 --> 00:10:17,240 Speaker 1: as we just saw just this week, so we can 214 00:10:17,280 --> 00:10:20,439 Speaker 1: see that. The other reason why is because they get 215 00:10:20,440 --> 00:10:24,600 Speaker 1: too technical. So, for example, quantitative easing is when they're 216 00:10:24,840 --> 00:10:29,760 Speaker 1: easing monetary policy, so tight monetary policy loose monetary policy, 217 00:10:29,760 --> 00:10:31,800 Speaker 1: if we think about it like that. The problem is 218 00:10:32,040 --> 00:10:34,520 Speaker 1: these analysts getting too smart for their own good, have 219 00:10:34,600 --> 00:10:39,480 Speaker 1: a very specific technical definition of quantitative easing, and so 220 00:10:39,720 --> 00:10:43,840 Speaker 1: if the Federal Reserve does easing, they inject liquidity through 221 00:10:44,000 --> 00:10:47,640 Speaker 1: other means, they would say, well, that's not technically quantitative easing. 222 00:10:48,120 --> 00:10:50,079 Speaker 1: So for example, when the banks collapsed in March of 223 00:10:50,080 --> 00:10:51,960 Speaker 1: twenty twenty three, they set up a new funding facility 224 00:10:52,000 --> 00:10:55,080 Speaker 1: called BTFP Bank Term Funding Facility. They gave over one 225 00:10:55,200 --> 00:10:58,719 Speaker 1: hundred billion dollars to the market. That was easing. In 226 00:10:58,840 --> 00:11:02,880 Speaker 1: my opinion, it propped up the market. It showed demonstrated 227 00:11:02,920 --> 00:11:05,559 Speaker 1: to the world that the Fed put was active, and 228 00:11:05,720 --> 00:11:08,160 Speaker 1: we saw the markets take off because of that, but 229 00:11:08,240 --> 00:11:11,199 Speaker 1: the analysts are going to say, well that's not QE. Okay, 230 00:11:11,679 --> 00:11:15,720 Speaker 1: you're right, and so the words are starting to lose definition, right, 231 00:11:15,960 --> 00:11:17,600 Speaker 1: and so we're starting to see it. The other reason 232 00:11:17,640 --> 00:11:20,040 Speaker 1: why I think they're wrong is again they don't understand. 233 00:11:20,080 --> 00:11:24,079 Speaker 1: They're so smart on the technical analyst side, they're not 234 00:11:24,200 --> 00:11:28,440 Speaker 1: taking into consideration other elements such as like human psychology, 235 00:11:29,000 --> 00:11:31,400 Speaker 1: human greed and things like that, and those are important 236 00:11:31,440 --> 00:11:33,719 Speaker 1: to understand. When it comes to trying to guess what 237 00:11:33,920 --> 00:11:36,240 Speaker 1: somebody's going to do. You have to look at all 238 00:11:36,440 --> 00:11:38,160 Speaker 1: of the reasons that they have in front of them, 239 00:11:38,480 --> 00:11:41,040 Speaker 1: not just the technical, data driven ones, but you have 240 00:11:41,080 --> 00:11:43,120 Speaker 1: to look at human incentives and things like that. I 241 00:11:43,160 --> 00:11:45,160 Speaker 1: think that's why they're wrong as well. Now back to 242 00:11:45,200 --> 00:11:47,800 Speaker 1: the true constraints. So the problem with the Federal Reserve 243 00:11:47,880 --> 00:11:50,280 Speaker 1: is they're sort of boxed in, right, They're fighting between 244 00:11:50,280 --> 00:11:53,040 Speaker 1: the Treasure and the Fed, and they want to continue 245 00:11:53,080 --> 00:11:56,680 Speaker 1: to raise rates, make money more expensive, to slow down inflation. 246 00:11:57,120 --> 00:11:59,280 Speaker 1: But the problem is as they do that, it starts 247 00:11:59,320 --> 00:12:03,200 Speaker 1: to drag on the economy, starts to you know, it push. 248 00:12:03,600 --> 00:12:05,559 Speaker 1: Their goal is to bring stock prices down, home price 249 00:12:05,600 --> 00:12:07,680 Speaker 1: down things like that. The problem is when that happens 250 00:12:07,760 --> 00:12:10,679 Speaker 1: is that you and I feel less wealthy, but we 251 00:12:10,880 --> 00:12:12,920 Speaker 1: are a little bit less wealthy. So you're not selling 252 00:12:12,960 --> 00:12:15,560 Speaker 1: as many stocks, and there's no capital gain taxes you're paying. 253 00:12:15,559 --> 00:12:18,000 Speaker 1: You're not selling your home, you're not paying capital gains taxes. 254 00:12:18,320 --> 00:12:20,800 Speaker 1: And when you're not paying those taxes, then the government, 255 00:12:21,080 --> 00:12:24,920 Speaker 1: the US Treasury, doesn't receive as much tax revenue. So 256 00:12:25,160 --> 00:12:28,800 Speaker 1: that's problem number one. The income for the government goes down, 257 00:12:28,960 --> 00:12:31,200 Speaker 1: but the government's spending more money. The government needs more 258 00:12:31,240 --> 00:12:33,640 Speaker 1: income to keep up with is high spending, but the 259 00:12:33,720 --> 00:12:36,559 Speaker 1: income goes down, and at the same time, as the 260 00:12:36,600 --> 00:12:40,280 Speaker 1: FED makes the debt more expensive, the Treasury's expenses go 261 00:12:40,400 --> 00:12:42,880 Speaker 1: through the room. So the Treasury's income goes down, we're 262 00:12:42,920 --> 00:12:45,520 Speaker 1: not paying taxes, and then their interest goes up because 263 00:12:45,559 --> 00:12:48,560 Speaker 1: of the rate increases. And so the FED, by trying 264 00:12:48,600 --> 00:12:51,880 Speaker 1: to fight inflation, is actually fighting against what the treasury wants. 265 00:12:51,960 --> 00:12:54,640 Speaker 1: The Treasury needs their income to go up and their 266 00:12:54,679 --> 00:12:56,839 Speaker 1: expenses to go down, which is the opposite of what 267 00:12:56,960 --> 00:12:59,800 Speaker 1: the Treasury is doing. Now. A lot of people might 268 00:12:59,800 --> 00:13:02,000 Speaker 1: say say that the FED is doing this. They will 269 00:13:02,040 --> 00:13:04,320 Speaker 1: agree with me, but they'll say that the FED wins. 270 00:13:04,880 --> 00:13:07,760 Speaker 1: But I would say, again putting my psychologists hat on, 271 00:13:07,880 --> 00:13:12,920 Speaker 1: my human incentive hat back on, if I would, I 272 00:13:13,080 --> 00:13:15,679 Speaker 1: understand the FED wants to regain control, they want to 273 00:13:15,800 --> 00:13:18,080 Speaker 1: regain some legitimacy. They need to show that they can 274 00:13:18,240 --> 00:13:24,040 Speaker 1: stop inflation. However, at what cost. You see, if they 275 00:13:24,160 --> 00:13:26,040 Speaker 1: fight against the Treasury and they end up putting the 276 00:13:26,040 --> 00:13:30,840 Speaker 1: government bankrupt out of business, then the dollar they're trying 277 00:13:30,920 --> 00:13:35,960 Speaker 1: to protect basically falls apart as well. You see, they're 278 00:13:36,040 --> 00:13:40,800 Speaker 1: all operating within these constraints. Now. The FED is losing 279 00:13:40,920 --> 00:13:43,280 Speaker 1: a massive amount of money due to their own policies, 280 00:13:43,520 --> 00:13:45,800 Speaker 1: but they're sort of putting those off of book. They're 281 00:13:45,840 --> 00:13:48,080 Speaker 1: not really seeing those now. Like I said, I've been 282 00:13:48,120 --> 00:13:50,120 Speaker 1: talking about this fight between the FED and the Treasury 283 00:13:50,320 --> 00:13:53,160 Speaker 1: at length, probably over the last year. I've done several 284 00:13:53,240 --> 00:13:55,439 Speaker 1: videos on my main YouTube, chanel Mark Moss about these. 285 00:13:55,679 --> 00:13:57,640 Speaker 1: If you want to get more into that, just go 286 00:13:57,720 --> 00:13:59,800 Speaker 1: to my main YouTube channel, Mark Moss and just search that. 287 00:14:00,000 --> 00:14:02,839 Speaker 1: You'll find a bunch of videos talking about that. But 288 00:14:02,920 --> 00:14:06,280 Speaker 1: what I want to talk about specifically is where we're 289 00:14:06,280 --> 00:14:08,599 Speaker 1: at right now and what the Treasury is doing to 290 00:14:08,760 --> 00:14:11,559 Speaker 1: force the Fed's hand and how this is playing out 291 00:14:11,559 --> 00:14:13,640 Speaker 1: and what we should be doing about it? All right, now, 292 00:14:14,240 --> 00:14:16,199 Speaker 1: the Treasury is in a tough spot. They don't like this. 293 00:14:16,320 --> 00:14:19,640 Speaker 1: As I said, their income went down, their expenses went up. 294 00:14:19,640 --> 00:14:22,440 Speaker 1: As a matter of fact, their expenses. The interest on 295 00:14:22,640 --> 00:14:25,520 Speaker 1: the debt, because now it's more expensive, has now exceeded 296 00:14:25,680 --> 00:14:29,440 Speaker 1: one trillion dollars just an interest alone. Now money is 297 00:14:29,480 --> 00:14:31,480 Speaker 1: just going into the ether, if you will. And to 298 00:14:31,560 --> 00:14:33,560 Speaker 1: think about how incredible it is to put it into 299 00:14:33,680 --> 00:14:36,880 Speaker 1: some sort of numbers, it's now more than what the 300 00:14:37,040 --> 00:14:41,040 Speaker 1: US government spends on its military. And that may not 301 00:14:41,400 --> 00:14:43,520 Speaker 1: mean much to you, but for a frame of reference, 302 00:14:43,760 --> 00:14:46,960 Speaker 1: the US spends more on its military than the next 303 00:14:47,080 --> 00:14:51,160 Speaker 1: ten countries combined. So more than Russia, more than China, 304 00:14:51,360 --> 00:14:54,200 Speaker 1: more than Iran, more than Brazil, more than all of 305 00:14:54,280 --> 00:14:57,960 Speaker 1: them combined. Right, it's not just a big number, it's 306 00:14:58,000 --> 00:15:00,120 Speaker 1: a massive number. And now we're spending more on our 307 00:15:00,240 --> 00:15:02,760 Speaker 1: debt than that. To put it into another frame of reference, 308 00:15:03,000 --> 00:15:05,560 Speaker 1: it took the United States government two hundred and five 309 00:15:05,680 --> 00:15:10,480 Speaker 1: years to get to one trillion dollars in debt. Now 310 00:15:10,560 --> 00:15:13,600 Speaker 1: we're thirty five trillion dollars in debt. But just the 311 00:15:13,880 --> 00:15:17,000 Speaker 1: interest on the debt just the interest alone is more 312 00:15:17,080 --> 00:15:19,320 Speaker 1: than what it took the government two hundred and five 313 00:15:19,400 --> 00:15:23,680 Speaker 1: years to accumulate. It's amazing. So this is where the 314 00:15:23,760 --> 00:15:26,440 Speaker 1: government is. They have to get this interest right down. 315 00:15:26,520 --> 00:15:28,800 Speaker 1: That is the battle that we have. The FED needs 316 00:15:28,880 --> 00:15:31,440 Speaker 1: raids up. They need them higher for longer to cool 317 00:15:31,480 --> 00:15:34,520 Speaker 1: the market, to tame price and asset inflation, so they 318 00:15:34,560 --> 00:15:37,680 Speaker 1: can regain the world's confidence. Right They've been in this 319 00:15:37,800 --> 00:15:41,160 Speaker 1: tightening stance for over two years. But the Treasury they 320 00:15:41,240 --> 00:15:43,720 Speaker 1: need the Fed to raise rates or lower rates back down. 321 00:15:44,000 --> 00:15:46,120 Speaker 1: They want the Fed to switch back to easing, and 322 00:15:46,200 --> 00:15:48,080 Speaker 1: they want it for two reasons right right, One they 323 00:15:48,120 --> 00:15:50,360 Speaker 1: want to get the market's economy going so tax refeats 324 00:15:50,400 --> 00:15:52,560 Speaker 1: go back up, and two they need the interest rate 325 00:15:52,680 --> 00:15:55,840 Speaker 1: to go back down. Now, as this plays out, I 326 00:15:55,960 --> 00:15:58,040 Speaker 1: believe they are forcing the Fed's hands. I believe this's 327 00:15:58,040 --> 00:16:00,560 Speaker 1: actually they've taken over the last couple months that as 328 00:16:00,680 --> 00:16:02,520 Speaker 1: much as Jerome Power wants to do job owned the 329 00:16:02,520 --> 00:16:04,560 Speaker 1: market to cool down, it's not gonna cool down. We 330 00:16:04,720 --> 00:16:07,440 Speaker 1: already know what's coming. If you're paying attention to this, 331 00:16:07,680 --> 00:16:10,120 Speaker 1: I'm gonna tell you more. But I also want to 332 00:16:10,160 --> 00:16:12,640 Speaker 1: let you know that next week I have a live 333 00:16:12,840 --> 00:16:16,080 Speaker 1: event that I'm doing. It's not gonna be here pre recorded, 334 00:16:16,080 --> 00:16:17,880 Speaker 1: It's gonna be live, and I'm gonna show you how 335 00:16:17,920 --> 00:16:20,240 Speaker 1: to seize the upside of the Fed's you turn that's 336 00:16:20,280 --> 00:16:23,400 Speaker 1: coming this year while side stepping market volatility. You can 337 00:16:23,480 --> 00:16:26,000 Speaker 1: join me live. I have about thirty five slides. I'm 338 00:16:26,000 --> 00:16:28,640 Speaker 1: gonna show you ish thirty five ISH and I'm gonna 339 00:16:28,640 --> 00:16:30,240 Speaker 1: do all live Q and A. So if you have 340 00:16:30,360 --> 00:16:32,880 Speaker 1: questions about this, you can ask me. Go dot one, 341 00:16:32,960 --> 00:16:36,320 Speaker 1: Markmoss dot com, slash you turn again. That's go dot one, 342 00:16:36,400 --> 00:16:39,840 Speaker 1: Markmoss dot com, slash U turn. But getting back in 343 00:16:39,920 --> 00:16:42,600 Speaker 1: to sort of frame this up, like I said, we 344 00:16:42,760 --> 00:16:45,480 Speaker 1: know the Fed's gonna pivot. Is it gonna be three 345 00:16:45,520 --> 00:16:47,600 Speaker 1: times or six times? We don't know. But Jerome Power 346 00:16:47,760 --> 00:16:50,120 Speaker 1: just kind of came out and said, oh, we're gonna 347 00:16:50,160 --> 00:16:51,760 Speaker 1: drag our feet little bit. We're gonna try to push 348 00:16:51,800 --> 00:16:54,480 Speaker 1: out from March until May. They say they want to 349 00:16:54,480 --> 00:16:56,640 Speaker 1: push out as far as it can be pushed out. 350 00:16:56,960 --> 00:16:59,360 Speaker 1: And so Jane Allen and the Treasury is like, Nope, 351 00:16:59,400 --> 00:17:01,360 Speaker 1: that's not gonna work for us. We need it much sooner. 352 00:17:01,480 --> 00:17:03,560 Speaker 1: We have all this debt that we need to refinance. 353 00:17:03,600 --> 00:17:05,560 Speaker 1: We need rates to come down, and so we're going 354 00:17:05,640 --> 00:17:08,800 Speaker 1: to have to force you into action. Now. Depending on 355 00:17:08,880 --> 00:17:11,239 Speaker 1: who wins this policy battle, there's going to be very 356 00:17:11,240 --> 00:17:14,560 Speaker 1: different outcomes for the economy, for the market, for our portfolios, 357 00:17:15,000 --> 00:17:17,480 Speaker 1: and all of that. But if we want to dive 358 00:17:17,520 --> 00:17:20,240 Speaker 1: into what the Treasury is doing right now, and we're 359 00:17:20,440 --> 00:17:21,880 Speaker 1: and we can see what's going on in the market, 360 00:17:21,960 --> 00:17:23,480 Speaker 1: so it makes better sense to you. We can see 361 00:17:23,480 --> 00:17:27,800 Speaker 1: that historically, when the Treasury issues debt, right, they sell 362 00:17:27,840 --> 00:17:31,119 Speaker 1: bonds to issue debt, on average, about twenty percent of 363 00:17:31,600 --> 00:17:34,280 Speaker 1: the money raise comes from the sale of short term 364 00:17:34,400 --> 00:17:37,680 Speaker 1: debt or less than one year's maturity. Those are what 365 00:17:37,760 --> 00:17:40,480 Speaker 1: we call bills. The other eighty percent of the debt 366 00:17:40,560 --> 00:17:44,080 Speaker 1: they sell are in longer term notes and bonds because 367 00:17:44,200 --> 00:17:46,520 Speaker 1: notes and bonds carry interest rate or what we call 368 00:17:46,680 --> 00:17:50,280 Speaker 1: duration risk, whereas the shorter term maturity bills they generally don't, 369 00:17:51,320 --> 00:17:53,600 Speaker 1: So that way their effects on marketing the economy they 370 00:17:53,680 --> 00:17:56,800 Speaker 1: differ substantially. Right, if I borrow money for longer, you 371 00:17:56,840 --> 00:17:58,720 Speaker 1: want some more return. If I borrow twenty bucks off tomorrow, 372 00:17:58,760 --> 00:18:00,800 Speaker 1: you don't really care. If you're just tune in, you're 373 00:18:00,840 --> 00:18:03,280 Speaker 1: listening to the Marcomas Show. We're talking about the battle 374 00:18:03,320 --> 00:18:06,080 Speaker 1: between the Fed and the Treasury, and we're going to 375 00:18:06,119 --> 00:18:07,440 Speaker 1: talk about how this is going to play out in 376 00:18:07,480 --> 00:18:10,120 Speaker 1: twenty twenty four, how the Treasury is forcing the Fed's hand. 377 00:18:10,400 --> 00:18:12,000 Speaker 1: But I'm gonna take a very quick break, but I'm 378 00:18:12,040 --> 00:18:13,280 Speaker 1: going to be right back. You don't want to miss 379 00:18:13,280 --> 00:18:15,000 Speaker 1: what's coming up next, so don't go away. I'll be 380 00:18:15,119 --> 00:18:20,359 Speaker 1: right back. All right, Welcome back. If you just tune in, 381 00:18:20,400 --> 00:18:22,359 Speaker 1: you're listening to the Mark Mass Show. We're talking about 382 00:18:22,480 --> 00:18:25,760 Speaker 1: the battle between the Treasury, the US Treasury with Janet 383 00:18:25,800 --> 00:18:28,679 Speaker 1: Ellen and the Federal Reserve and Jerome Powell, and how 384 00:18:28,760 --> 00:18:31,159 Speaker 1: that's going to affect markets this year in twenty twenty four. Now, 385 00:18:31,359 --> 00:18:34,480 Speaker 1: I was talking about how the Treasury is taking action 386 00:18:35,000 --> 00:18:37,640 Speaker 1: to force the Fed hand. The Fed is the Treasury 387 00:18:37,800 --> 00:18:40,360 Speaker 1: needs policy to ease, They need rates to come back down. 388 00:18:40,520 --> 00:18:43,439 Speaker 1: The Fed wants to keep them higher for longer. Jerome 389 00:18:43,480 --> 00:18:45,360 Speaker 1: Powell just had their meeting and he said that we're 390 00:18:45,400 --> 00:18:48,520 Speaker 1: going to keep them higher for longer than most people want. 391 00:18:48,760 --> 00:18:51,280 Speaker 1: And Janet Allen's like, uh no, you're not. I'm going 392 00:18:51,320 --> 00:18:53,960 Speaker 1: to force you into action. So how is she doing that? Well? 393 00:18:54,240 --> 00:18:56,240 Speaker 1: I was saying, as they issue debt, they have to 394 00:18:56,280 --> 00:19:02,840 Speaker 1: sell bonds, bonds, bills, notes. Twenty percent is short term, 395 00:19:03,680 --> 00:19:07,280 Speaker 1: eighty percent is long term. That's historically, But what we're 396 00:19:07,320 --> 00:19:09,520 Speaker 1: seeing right now, if we dig into the bond market, 397 00:19:09,640 --> 00:19:11,760 Speaker 1: we can see that instead of historically the eighty twenty 398 00:19:11,920 --> 00:19:14,840 Speaker 1: net issuance on the short term bill side, in twenty 399 00:19:14,920 --> 00:19:17,480 Speaker 1: twenty three we saw a net issuance of almost two 400 00:19:17,720 --> 00:19:22,000 Speaker 1: trillion dollars in bills and negative net issuance in the 401 00:19:22,200 --> 00:19:25,840 Speaker 1: longer dated notes. So what does that mean. What that 402 00:19:25,960 --> 00:19:29,400 Speaker 1: means is that more notes were redeemed in dollar terms 403 00:19:29,440 --> 00:19:32,040 Speaker 1: than they were issued. And as far as I know, 404 00:19:32,200 --> 00:19:34,920 Speaker 1: we haven't seen negative net issuance in notes since the 405 00:19:35,040 --> 00:19:38,040 Speaker 1: Clinton era surpluses. It's been a long time. And it's 406 00:19:38,119 --> 00:19:40,919 Speaker 1: not just that they're easing up on the note issuances. 407 00:19:41,480 --> 00:19:43,640 Speaker 1: What they've done is they've brought it down to negative. 408 00:19:43,960 --> 00:19:46,639 Speaker 1: And the key pieces right here is that they're front 409 00:19:46,760 --> 00:19:50,280 Speaker 1: loading everything they can into short term bills. So normally 410 00:19:50,359 --> 00:19:52,800 Speaker 1: they sell on the long end, right now they're selling 411 00:19:52,840 --> 00:19:56,400 Speaker 1: on the short end. Now, if you look at some charts, 412 00:19:56,440 --> 00:19:58,880 Speaker 1: you can see just how extreme this is. But they 413 00:19:58,920 --> 00:20:01,560 Speaker 1: are really loading this in now again to catch you up. 414 00:20:01,680 --> 00:20:06,280 Speaker 1: Bills are short term paper, so that's typically you know, 415 00:20:06,480 --> 00:20:09,200 Speaker 1: less than a year. Notes are longer dated two years 416 00:20:09,240 --> 00:20:12,280 Speaker 1: to ten years. Right now, I've talked about this, you 417 00:20:12,359 --> 00:20:14,639 Speaker 1: probably heard me. Many people, include myself, have thought that 418 00:20:14,760 --> 00:20:17,560 Speaker 1: the Treasury had no choice but to issue all these 419 00:20:17,640 --> 00:20:20,880 Speaker 1: bills on this short side because interest rates were so high, 420 00:20:21,560 --> 00:20:23,240 Speaker 1: and they were pushed up and they were held high 421 00:20:23,280 --> 00:20:25,720 Speaker 1: by the Fed, and the Treasury didn't want to lock 422 00:20:25,800 --> 00:20:28,720 Speaker 1: in that debt long term, right, so we just had 423 00:20:28,800 --> 00:20:31,240 Speaker 1: you know, zero percent one percent rates. And I thought 424 00:20:31,280 --> 00:20:33,960 Speaker 1: the Treasury should have locked all that long term dead 425 00:20:34,000 --> 00:20:36,760 Speaker 1: in at zero percent, Like why didn't they now it's 426 00:20:36,800 --> 00:20:38,680 Speaker 1: at five percent. They don't want to lock it in 427 00:20:38,840 --> 00:20:41,760 Speaker 1: for thirty years or ten years at those levels. And 428 00:20:41,840 --> 00:20:44,040 Speaker 1: so I thought Janet Yellen was like the worst trader 429 00:20:44,080 --> 00:20:47,080 Speaker 1: in history. We have all these homeowners like myself locked 430 00:20:47,119 --> 00:20:50,040 Speaker 1: in some mortgages thirty year mortgages in the three percent range. 431 00:20:50,280 --> 00:20:52,360 Speaker 1: You have all these corporations who locked in long term 432 00:20:52,400 --> 00:20:56,679 Speaker 1: corporate debt at these rates. But yet Yellen, who probably 433 00:20:56,760 --> 00:20:59,320 Speaker 1: knew more than anybody had insider information, didn't lock in 434 00:20:59,440 --> 00:21:02,320 Speaker 1: the government at those rates. So I thought that was 435 00:21:02,320 --> 00:21:04,760 Speaker 1: a pretty big mistake. But now that I'm looking at 436 00:21:04,800 --> 00:21:06,919 Speaker 1: this from a different lens, it looks like what's happening 437 00:21:07,040 --> 00:21:10,240 Speaker 1: is she's loading it all on the short term rate 438 00:21:10,960 --> 00:21:13,280 Speaker 1: to force the Fed's hands. It looks like it's deliberate 439 00:21:13,320 --> 00:21:16,200 Speaker 1: by yelling and the Treasury to fight against FED policy 440 00:21:16,480 --> 00:21:19,400 Speaker 1: and then ultimately force them into taking action the action 441 00:21:19,480 --> 00:21:21,280 Speaker 1: they don't want to do. Now, there was an article 442 00:21:21,440 --> 00:21:24,320 Speaker 1: I was just reading by Steven Moran. He's from the 443 00:21:24,359 --> 00:21:28,400 Speaker 1: Manhattan Institute. He's a former senior advisor at the US Treasury, 444 00:21:28,720 --> 00:21:31,960 Speaker 1: just in twenty twenty one, so he's pretty in tune 445 00:21:31,960 --> 00:21:34,439 Speaker 1: with the inner workings over there. He said that quote, 446 00:21:34,800 --> 00:21:39,160 Speaker 1: the Treasury Department has offset QT quantitative tightening by increasing 447 00:21:39,240 --> 00:21:42,680 Speaker 1: the share of total issuance for bills far beyond the norm. 448 00:21:43,680 --> 00:21:45,920 Speaker 1: That's what I'm saying, right. Traditionally there's more on the 449 00:21:45,960 --> 00:21:48,119 Speaker 1: back end. Now they're doing it much more on the 450 00:21:48,160 --> 00:21:51,119 Speaker 1: short end. He goes on to say the increased duration 451 00:21:51,320 --> 00:21:54,679 Speaker 1: risk that QT quantitative tightening supplies to the market has 452 00:21:54,760 --> 00:21:57,800 Speaker 1: been nullified by the reduced duration risks supplied to the 453 00:21:57,880 --> 00:22:01,359 Speaker 1: market by changes to the Treasury's issue, it's profile and 454 00:22:01,480 --> 00:22:04,280 Speaker 1: political actors at the Treasury have managed to run rough 455 00:22:04,400 --> 00:22:08,560 Speaker 1: shod over the stance of monetary policy end quote. So 456 00:22:09,320 --> 00:22:12,359 Speaker 1: he said it right there, he said, the Treasury is 457 00:22:12,440 --> 00:22:14,680 Speaker 1: running rough shod. I don't know if you know what 458 00:22:14,760 --> 00:22:16,720 Speaker 1: that word means. I had to look it up. I'm 459 00:22:16,760 --> 00:22:19,720 Speaker 1: just kidding. But in normal like non FED speak, basically 460 00:22:19,800 --> 00:22:21,600 Speaker 1: what that means is the Treasury is having their way 461 00:22:21,640 --> 00:22:24,040 Speaker 1: with the Fed. Right, it means that the Treasury is 462 00:22:24,160 --> 00:22:26,360 Speaker 1: forcing their will on the FED. They're forcing their own 463 00:22:26,400 --> 00:22:28,400 Speaker 1: agenda on the FED. So a lot of people think 464 00:22:28,840 --> 00:22:31,360 Speaker 1: the Fed's going to win. As I kind of laid 465 00:22:31,400 --> 00:22:33,920 Speaker 1: out before I even went into this, them winning means 466 00:22:34,000 --> 00:22:36,280 Speaker 1: the government loses. That's probably not going to work out. 467 00:22:36,320 --> 00:22:38,000 Speaker 1: And as we can see right now, it looks like 468 00:22:38,080 --> 00:22:41,120 Speaker 1: the Treasury is having their way. So how exactly does 469 00:22:41,200 --> 00:22:44,560 Speaker 1: it do this? What's the mechanism there? So what happens 470 00:22:44,680 --> 00:22:48,199 Speaker 1: is by issuing so many short term bills, the Treasury 471 00:22:48,320 --> 00:22:53,080 Speaker 1: is effectively printing money. Now, the FED is in quantitative tightening, 472 00:22:53,080 --> 00:22:55,359 Speaker 1: they're trying to tighten the money supply, but the Treasury 473 00:22:55,400 --> 00:22:58,399 Speaker 1: is effectively printing money by doing this, which counteracts them. 474 00:22:58,800 --> 00:23:00,520 Speaker 1: In the article that I was just read, and Stephan 475 00:23:00,640 --> 00:23:03,959 Speaker 1: ron is saying that Janet Yellen is draining the reverse 476 00:23:04,080 --> 00:23:07,320 Speaker 1: repo facility on purpose, so the Fed is forced to 477 00:23:07,440 --> 00:23:12,000 Speaker 1: stop quantitative tightening. He says, quote, by increasing the bill issuance, 478 00:23:12,400 --> 00:23:16,040 Speaker 1: the Treasury ensures the RRP drains more quickly. By keeping 479 00:23:16,119 --> 00:23:19,840 Speaker 1: bill issuance high, the Treasury is able to not only 480 00:23:19,960 --> 00:23:23,560 Speaker 1: to counteract quantitative tightening performed by the Fed, but also 481 00:23:24,119 --> 00:23:26,640 Speaker 1: is the key piece, but also to force the Fed 482 00:23:26,720 --> 00:23:29,560 Speaker 1: to taper QT or to shut it down. This is 483 00:23:29,560 --> 00:23:33,600 Speaker 1: an abomination monetary policy under the control of fiscal authorities. 484 00:23:34,560 --> 00:23:37,920 Speaker 1: H That's what he said. So let's think about that 485 00:23:38,000 --> 00:23:39,440 Speaker 1: for a minute. Now, you hear a lot of people, 486 00:23:39,440 --> 00:23:42,160 Speaker 1: will probably other analysts on TV, on YouTube, et cetera, 487 00:23:42,480 --> 00:23:46,160 Speaker 1: talking about the reverse repo window. Now, the reverse repo 488 00:23:46,320 --> 00:23:48,480 Speaker 1: is where banks put money with the FED and it 489 00:23:48,640 --> 00:23:51,680 Speaker 1: goes to overnight settlement. And we saw that number explode 490 00:23:51,760 --> 00:23:55,840 Speaker 1: after the pandemic, and now it's being drained. A lot 491 00:23:55,880 --> 00:23:58,040 Speaker 1: of people you'll find no shorts of people saying that 492 00:23:58,400 --> 00:24:00,480 Speaker 1: as this gets drained, it's a big problem. And once 493 00:24:00,520 --> 00:24:03,080 Speaker 1: it hits zero or close to that, back to normal 494 00:24:03,160 --> 00:24:04,760 Speaker 1: means it's going to be a big problem. And the 495 00:24:04,800 --> 00:24:06,240 Speaker 1: whole thing is going to come crashing down. That's what 496 00:24:06,240 --> 00:24:10,840 Speaker 1: they'll say. However, basically, what this article from Steve Mourana 497 00:24:10,880 --> 00:24:15,040 Speaker 1: is saying a Treasury person, he's saying that they're draining 498 00:24:15,119 --> 00:24:18,520 Speaker 1: the RRP on purpose, and the reason they want to 499 00:24:18,600 --> 00:24:21,240 Speaker 1: drain it on purpose is so that the Fed is 500 00:24:21,400 --> 00:24:24,840 Speaker 1: forced into easy and back into the market again. Now, 501 00:24:24,920 --> 00:24:27,640 Speaker 1: why would Yellen try to force the Fed back into 502 00:24:27,680 --> 00:24:31,879 Speaker 1: quantitay easing from a tightening position. It's a good question. Now, 503 00:24:31,960 --> 00:24:34,600 Speaker 1: before I answer that, let's look at the Fed's dilemma. 504 00:24:35,000 --> 00:24:38,040 Speaker 1: Why would the Fed not want to do that? Why 505 00:24:38,080 --> 00:24:39,359 Speaker 1: would it be a disact? Why do they have to 506 00:24:39,400 --> 00:24:42,040 Speaker 1: be forced into it? Why don't they just adopt it? Right? Well, 507 00:24:42,200 --> 00:24:45,800 Speaker 1: it's because the Fed has a dual mandate. Now they 508 00:24:45,880 --> 00:24:48,560 Speaker 1: probably have a third mandate, but they have a dual 509 00:24:48,600 --> 00:24:53,840 Speaker 1: mandate one stable prices, two full employment. Now, if we 510 00:24:53,840 --> 00:24:57,399 Speaker 1: look at the stable prices side, how stable have prices been? 511 00:24:57,760 --> 00:24:59,359 Speaker 1: It looks like the price of everything went up by 512 00:24:59,359 --> 00:25:02,119 Speaker 1: about fifty per Now prices are coming back down on 513 00:25:02,240 --> 00:25:05,480 Speaker 1: certain things. They're anything but stable. Their goal is two 514 00:25:05,640 --> 00:25:09,679 Speaker 1: percent price inflation. So even though inflation is stepped, it's 515 00:25:09,680 --> 00:25:11,639 Speaker 1: still in our purchasing power still in our life, if 516 00:25:11,680 --> 00:25:14,640 Speaker 1: you will. At least, if it's at two percent, it's 517 00:25:14,800 --> 00:25:18,440 Speaker 1: predictable as much as they're going up. The problem is 518 00:25:18,480 --> 00:25:21,760 Speaker 1: when it goes from zero percent to negative percent to 519 00:25:22,040 --> 00:25:24,600 Speaker 1: nine percent like we saw, then it drops all the 520 00:25:24,640 --> 00:25:26,399 Speaker 1: way back down to two or three, and that's anything 521 00:25:26,480 --> 00:25:29,000 Speaker 1: but stable. And when it's not stable, how do we 522 00:25:29,200 --> 00:25:31,000 Speaker 1: plan our lives? And more importantly, how do we plan 523 00:25:31,080 --> 00:25:34,000 Speaker 1: our businesses? Do I buy supplies now and lock in 524 00:25:34,080 --> 00:25:36,000 Speaker 1: the prices now or do I wait till later, like 525 00:25:36,080 --> 00:25:38,600 Speaker 1: when during the pandemic, like lumber shot through the roof, 526 00:25:39,200 --> 00:25:40,760 Speaker 1: Oh my gosh, is it going to keep going higher? 527 00:25:40,840 --> 00:25:44,080 Speaker 1: Or should I lock it in right now? When everything 528 00:25:44,119 --> 00:25:46,440 Speaker 1: is shooting higher, people are rushing out to buy things, 529 00:25:48,080 --> 00:25:51,720 Speaker 1: and so they obviously didn't keep things stable, say the least, 530 00:25:52,119 --> 00:25:54,440 Speaker 1: then they have the full employment right, and so we 531 00:25:54,560 --> 00:25:58,359 Speaker 1: can see that that inflation wrecking ball messes up a 532 00:25:58,400 --> 00:26:00,880 Speaker 1: lot of things, messes up the way businesses can operate, 533 00:26:00,920 --> 00:26:03,000 Speaker 1: and mess up the way the economy works, and more 534 00:26:03,040 --> 00:26:05,240 Speaker 1: importantly makes the FED look horrible, because again they have 535 00:26:05,359 --> 00:26:08,720 Speaker 1: a mandate. If they can't achieve their goals they want 536 00:26:08,720 --> 00:26:10,760 Speaker 1: to achieve, then what do we have them for anyway. 537 00:26:11,400 --> 00:26:13,280 Speaker 1: They you know, let's let's look at some of their truck. 538 00:26:13,440 --> 00:26:16,720 Speaker 1: They told us that inflation wasn't a problem. They couldn't 539 00:26:16,720 --> 00:26:19,200 Speaker 1: get inflation. We can't get enough. We're gonna keep going, going, going, 540 00:26:19,440 --> 00:26:21,359 Speaker 1: he said, Joe, and prose, we're gonna let it run hot. 541 00:26:21,440 --> 00:26:23,919 Speaker 1: We're just gonna we're gonna overstimulate the market. And then 542 00:26:24,160 --> 00:26:27,000 Speaker 1: if we overshoot our targets so up, then as we 543 00:26:27,119 --> 00:26:28,760 Speaker 1: got the inflation, it's not a problem. It's not a problem. 544 00:26:28,760 --> 00:26:32,560 Speaker 1: It's not a problem. Then it's transitory it you know, 545 00:26:32,600 --> 00:26:35,760 Speaker 1: it's gonna go away. Then it ran way too hot, 546 00:26:35,840 --> 00:26:38,480 Speaker 1: and then eventually they were forced to scramble. And then 547 00:26:38,560 --> 00:26:41,840 Speaker 1: they scrambled so fast at this knee jerk reaction. And 548 00:26:41,960 --> 00:26:44,199 Speaker 1: now they went too far right. Now they've gone too 549 00:26:44,320 --> 00:26:48,520 Speaker 1: far and too fast the other way, tightening everything back up. 550 00:26:48,920 --> 00:26:52,560 Speaker 1: And I think, you know, in their sort of race 551 00:26:52,840 --> 00:26:56,240 Speaker 1: to their desperation to regain confidence, the confidence of the people, 552 00:26:56,720 --> 00:26:59,879 Speaker 1: the government and the government, uh you know, Powell and 553 00:27:00,080 --> 00:27:02,320 Speaker 1: the Fed, they're so focused on the war on inflation 554 00:27:02,600 --> 00:27:06,920 Speaker 1: that they've let it just go too far right. And 555 00:27:07,280 --> 00:27:09,000 Speaker 1: as I said before, in order for the FED to 556 00:27:09,119 --> 00:27:12,080 Speaker 1: win the war of inflation, then the Treasury has to lose. 557 00:27:12,800 --> 00:27:15,640 Speaker 1: It's a zero sum game here, that's the problem. They've 558 00:27:15,680 --> 00:27:18,240 Speaker 1: been trying to play this dance. But the end of 559 00:27:18,280 --> 00:27:20,440 Speaker 1: the day, the Treasury is gonna have to get their way. 560 00:27:20,480 --> 00:27:22,480 Speaker 1: So that's the stage for the battle. That's the stage 561 00:27:22,520 --> 00:27:24,639 Speaker 1: we've been watching over the last year. It's the stage 562 00:27:24,640 --> 00:27:26,760 Speaker 1: I've been talking about for a long time. Now I'm 563 00:27:26,760 --> 00:27:29,080 Speaker 1: gonna tell you how you can play this, how we 564 00:27:29,200 --> 00:27:32,200 Speaker 1: can set ourselves up to profit from this and not lose. 565 00:27:32,400 --> 00:27:33,920 Speaker 1: I'm gonna break that down for you in a minute. 566 00:27:33,920 --> 00:27:35,639 Speaker 1: But if you're just tune in you're listening to the 567 00:27:35,680 --> 00:27:37,960 Speaker 1: Mark Mass Show, I'm gonna be back with what I 568 00:27:38,040 --> 00:27:39,959 Speaker 1: think happens with the Fed and the Treasury battle that's 569 00:27:40,000 --> 00:27:43,159 Speaker 1: playing out, and how we position ourselves to profit and 570 00:27:43,280 --> 00:27:45,840 Speaker 1: sidestep the volatility. So'll be right back. Don't go away, 571 00:27:52,960 --> 00:27:54,400 Speaker 1: all right, Welcome back. If you're just tune in, you're 572 00:27:54,400 --> 00:27:56,280 Speaker 1: listening to the Mark Mass Show, we're talking about the 573 00:27:56,359 --> 00:27:59,960 Speaker 1: battle between the Fed and the Treasury and what happened 574 00:28:00,320 --> 00:28:03,080 Speaker 1: as this plays out, who ultimately wins, and more importantly, 575 00:28:03,119 --> 00:28:06,880 Speaker 1: how we win regardless. Now we've already seen the Fed 576 00:28:07,000 --> 00:28:10,000 Speaker 1: pause on raising rates, right, they paused them, and then 577 00:28:10,000 --> 00:28:12,520 Speaker 1: they started raising them again, and now they paused them again. 578 00:28:14,359 --> 00:28:16,119 Speaker 1: And like I said, they're admitting that we're going to 579 00:28:16,280 --> 00:28:19,040 Speaker 1: have lower rates this year, but they're dragging their feet, right, 580 00:28:19,240 --> 00:28:21,680 Speaker 1: They're trying to delay the cuts as long as possible. 581 00:28:21,960 --> 00:28:23,359 Speaker 1: But if we go back to the question that I 582 00:28:23,440 --> 00:28:26,359 Speaker 1: posed earlier, that I told you, I answer, why would 583 00:28:26,480 --> 00:28:29,920 Speaker 1: Yellen try to force the Fed back into qe would? 584 00:28:29,960 --> 00:28:31,880 Speaker 1: Why would why would she want them to go from 585 00:28:31,960 --> 00:28:34,440 Speaker 1: QT tightening back to easing? And I already told you 586 00:28:34,520 --> 00:28:37,960 Speaker 1: why they wouldn't want to, But why does Yellen want that? Well, 587 00:28:38,480 --> 00:28:41,840 Speaker 1: it's a math problem. It's a math problem, and it's 588 00:28:41,880 --> 00:28:44,720 Speaker 1: a political problem. Let's start with the math first. So 589 00:28:45,000 --> 00:28:48,080 Speaker 1: let's look at the math. If the Fed sells ten 590 00:28:48,200 --> 00:28:52,240 Speaker 1: year notes, ten year paper at five percent, then that rate, 591 00:28:52,560 --> 00:28:55,200 Speaker 1: the five percent, is locked in for ten years. And 592 00:28:55,320 --> 00:28:57,600 Speaker 1: the problem with locking in that money for ten years 593 00:28:57,680 --> 00:29:01,040 Speaker 1: is the Treasury can't afford that in order to afford 594 00:29:01,120 --> 00:29:02,960 Speaker 1: the debt that we have now, but more importantly, the 595 00:29:03,000 --> 00:29:04,400 Speaker 1: death that's about to come for the rest of the 596 00:29:04,480 --> 00:29:07,400 Speaker 1: year probably, I mean, we've been adding a trillion dollars 597 00:29:07,480 --> 00:29:10,080 Speaker 1: every quarter I will probably add another trillion dollars of 598 00:29:10,200 --> 00:29:11,880 Speaker 1: debt this year, So not just the debt that we have, 599 00:29:11,960 --> 00:29:13,560 Speaker 1: but the debt we're going to add in order to 600 00:29:13,640 --> 00:29:16,800 Speaker 1: afford that. Janet Allen, the Treasury needs rates to be 601 00:29:16,920 --> 00:29:20,880 Speaker 1: back to zero. She wants to get rates back down 602 00:29:20,960 --> 00:29:24,400 Speaker 1: potentially close to zero before she starts issuing the notes, 603 00:29:24,480 --> 00:29:28,720 Speaker 1: the longer duration notes in any serious quantity, and she 604 00:29:28,880 --> 00:29:31,040 Speaker 1: needs to issue some serious quantity to keep the government's 605 00:29:31,080 --> 00:29:35,080 Speaker 1: runaway spending programs going. They cannot quit spending. I think 606 00:29:35,120 --> 00:29:37,120 Speaker 1: it was two point seven or I think it was 607 00:29:37,160 --> 00:29:39,480 Speaker 1: two point seven trillion added to the national debt last year. 608 00:29:39,800 --> 00:29:42,560 Speaker 1: My guess is it's over three trillion this year, specifically 609 00:29:43,240 --> 00:29:46,200 Speaker 1: in an election year with wars going on, and more importantly, 610 00:29:46,240 --> 00:29:49,800 Speaker 1: because the government just continues to grow. You know, I thought, 611 00:29:49,880 --> 00:29:51,719 Speaker 1: you know, when I was watching these debt ceiling debates 612 00:29:51,800 --> 00:29:55,040 Speaker 1: go down, the Republicans that thrown out an offer to 613 00:29:55,120 --> 00:29:59,680 Speaker 1: the Democrats saying let's just hold spending down or let's 614 00:29:59,680 --> 00:30:01,719 Speaker 1: just go back to like spending and where we were 615 00:30:01,760 --> 00:30:04,880 Speaker 1: in twenty twenty before the pandemic, and I'm like, life 616 00:30:05,000 --> 00:30:08,000 Speaker 1: wasn't horrible, and you know, before the pandemic twenty twenty, 617 00:30:08,160 --> 00:30:11,320 Speaker 1: or saying at twenty nineteen like that wasn't catastrophic, Like 618 00:30:11,440 --> 00:30:13,480 Speaker 1: why couldn't we just go back to spending like we 619 00:30:13,560 --> 00:30:16,840 Speaker 1: did in twenty nineteen, right, Like we had plenty of 620 00:30:17,160 --> 00:30:20,840 Speaker 1: government programs and social programs and you know whatever the 621 00:30:20,960 --> 00:30:22,760 Speaker 1: roads were there, Like, why couldn't we go back to that? 622 00:30:22,800 --> 00:30:24,080 Speaker 1: And part of the reason why is because the government 623 00:30:24,120 --> 00:30:27,080 Speaker 1: has grown so much. If we were to take it back, 624 00:30:27,680 --> 00:30:29,840 Speaker 1: I mean, millions of people are going to be affected 625 00:30:29,920 --> 00:30:31,960 Speaker 1: by this. All types of jobs will be lost, and 626 00:30:32,000 --> 00:30:33,920 Speaker 1: programs will be cut and things like that. And so 627 00:30:34,040 --> 00:30:37,680 Speaker 1: the government continues to get bigger and bigger and bigger, 628 00:30:38,000 --> 00:30:39,880 Speaker 1: and there's no way to reverse that. So they need 629 00:30:39,960 --> 00:30:43,800 Speaker 1: to continue spending, and they need the rates to be 630 00:30:43,880 --> 00:30:46,920 Speaker 1: lower ones they can finance that debt. And two, like 631 00:30:47,000 --> 00:30:50,280 Speaker 1: I said, so that taxes go back up as we 632 00:30:50,440 --> 00:30:52,440 Speaker 1: sell our stocks, as we sell our homes, things like that, 633 00:30:52,640 --> 00:30:55,360 Speaker 1: all right now at the current rates, to give you 634 00:30:55,680 --> 00:30:58,960 Speaker 1: sort of an idea of how bad this is at 635 00:30:59,000 --> 00:31:02,120 Speaker 1: the current rates. Right now, the US what we call 636 00:31:02,320 --> 00:31:06,160 Speaker 1: true interest expense is more than all of the US 637 00:31:06,280 --> 00:31:09,200 Speaker 1: tax re seats. Now that's just true expenses. What are 638 00:31:09,200 --> 00:31:12,520 Speaker 1: true expenses. True expenses is what is mandatory, what has 639 00:31:12,600 --> 00:31:15,560 Speaker 1: to be spent. That's just the interest on the debt 640 00:31:16,640 --> 00:31:19,880 Speaker 1: and the entitlement spending. So that's Medicare, Medicaid, SEB, security, 641 00:31:19,960 --> 00:31:23,000 Speaker 1: things like that. That's money we owe to people that 642 00:31:23,280 --> 00:31:27,080 Speaker 1: has to be paid. That's just that alone is more 643 00:31:27,160 --> 00:31:29,840 Speaker 1: than all the US tax receeats. So the Treasury is 644 00:31:29,880 --> 00:31:33,080 Speaker 1: in a super tough spot now. The last big note 645 00:31:33,160 --> 00:31:35,760 Speaker 1: issuance when we issued them on the longer end of 646 00:31:35,800 --> 00:31:38,720 Speaker 1: the spectrum, was back in twenty twenty one when rates 647 00:31:38,760 --> 00:31:41,320 Speaker 1: were still at zero, and so now Yellen is trying 648 00:31:41,360 --> 00:31:44,040 Speaker 1: to force the Fed back into that range before she 649 00:31:44,160 --> 00:31:47,040 Speaker 1: can start flooding the market with those notes. Again, that's 650 00:31:47,120 --> 00:31:50,960 Speaker 1: why she's trying to drain the RRP with the bill issuance. 651 00:31:51,280 --> 00:31:54,440 Speaker 1: So that's the math problem, but it's also a political problem. 652 00:31:54,760 --> 00:31:57,680 Speaker 1: The political problem is that we're an electioneer and with 653 00:31:57,800 --> 00:32:00,320 Speaker 1: the economy sort of teetering on the brink, we gonna 654 00:32:00,320 --> 00:32:02,600 Speaker 1: have a recession? Are We're not gonna have recession. Yellen, 655 00:32:02,920 --> 00:32:05,520 Speaker 1: who's part of the Bide administration, they have an agenda, 656 00:32:05,760 --> 00:32:07,720 Speaker 1: and their agenda is to win, right. They want to 657 00:32:07,720 --> 00:32:09,880 Speaker 1: win the election. They want to maintain power. They want 658 00:32:09,880 --> 00:32:12,240 Speaker 1: the Democrats to maintain power, and so because of that, 659 00:32:12,680 --> 00:32:15,000 Speaker 1: they cannot have a recession. I made a video on 660 00:32:15,080 --> 00:32:18,000 Speaker 1: my man YouTube channel saying they couldn't afford a recession. 661 00:32:18,560 --> 00:32:20,920 Speaker 1: They can't afford a recession because if there is a recession, 662 00:32:21,000 --> 00:32:24,200 Speaker 1: that means tax receipts go down even more. Remember the 663 00:32:24,280 --> 00:32:28,080 Speaker 1: spending doesn't, just the income goes down. They can't afford 664 00:32:28,160 --> 00:32:30,520 Speaker 1: what they have now, how could they afford it in 665 00:32:30,600 --> 00:32:34,400 Speaker 1: a recession? They can't. And so because of that, Yellen 666 00:32:34,520 --> 00:32:37,000 Speaker 1: is trying to force their hands. She's continuing trying to 667 00:32:37,200 --> 00:32:41,640 Speaker 1: stack the short term paper, continuing to drain the RRP. 668 00:32:42,120 --> 00:32:48,480 Speaker 1: Now will she win? Is that checkmate? Or do you know? 669 00:32:48,600 --> 00:32:50,600 Speaker 1: Does the Fed have another rabbit out of their hat? 670 00:32:50,720 --> 00:32:56,200 Speaker 1: Do they fight back? Well, my guess. Before I guess, 671 00:32:56,440 --> 00:32:58,840 Speaker 1: let me tell you. Let's see. I think as I 672 00:32:58,920 --> 00:33:00,680 Speaker 1: kind of started out by saying, one of these financial 673 00:33:00,680 --> 00:33:02,320 Speaker 1: analysts who are smarter than me and a lot of 674 00:33:02,360 --> 00:33:04,560 Speaker 1: the inner workings and plumbings of this, but maybe fail 675 00:33:04,640 --> 00:33:07,840 Speaker 1: to look at other things. They don't look at all 676 00:33:07,920 --> 00:33:10,720 Speaker 1: the information in my opinion, right, so one of the 677 00:33:10,840 --> 00:33:13,000 Speaker 1: things like Harry Dent Junior, I hate to pick on him. 678 00:33:13,240 --> 00:33:15,160 Speaker 1: I think his work is brilliant. I've read five of 679 00:33:15,200 --> 00:33:16,720 Speaker 1: his books. I continue to read his books because his 680 00:33:17,360 --> 00:33:21,320 Speaker 1: research is correct. The assumptions are wrong, And the reason 681 00:33:21,400 --> 00:33:24,600 Speaker 1: why the assumptions are wrong is they fail to take 682 00:33:24,640 --> 00:33:28,240 Speaker 1: into consideration how many magic tricks the FED has up 683 00:33:28,280 --> 00:33:32,520 Speaker 1: their sleep. So, for example, when the banks collapsed, Oh 684 00:33:32,560 --> 00:33:35,760 Speaker 1: my god, this is it. The whole thing's crashing down. Okay, Sure, 685 00:33:35,840 --> 00:33:37,800 Speaker 1: or they just paper over it and they just take 686 00:33:37,840 --> 00:33:40,480 Speaker 1: that debt on their books. Oh but Mark, don't you 687 00:33:40,520 --> 00:33:42,960 Speaker 1: know that the commercial real estate mortgage security market is 688 00:33:43,000 --> 00:33:44,680 Speaker 1: going to crash two point nine trillion dollars going to 689 00:33:44,720 --> 00:33:48,840 Speaker 1: sink all the regional banks. Sure, or the FED just 690 00:33:48,920 --> 00:33:50,600 Speaker 1: takes all those bonds on their books. I mean, they've 691 00:33:50,640 --> 00:33:53,520 Speaker 1: taken real estate bonds on their books before. Oh but Mark, 692 00:33:53,560 --> 00:33:55,000 Speaker 1: don't you know there's a receession coming. All these people 693 00:33:55,000 --> 00:33:57,640 Speaker 1: are going to lose their job. Yeah. Sure, the government 694 00:33:57,720 --> 00:34:00,479 Speaker 1: just sends everybody a thousand dollars STEMI check, like they 695 00:34:00,720 --> 00:34:02,800 Speaker 1: did just a couple of years ago. Right, You see 696 00:34:02,800 --> 00:34:04,320 Speaker 1: what I'm saying. And so the point is is that 697 00:34:04,600 --> 00:34:06,719 Speaker 1: these are the things that we already know about. How 698 00:34:06,760 --> 00:34:08,440 Speaker 1: many other things can they come up with that we 699 00:34:08,520 --> 00:34:11,239 Speaker 1: don't even know about. And that's the point that I 700 00:34:11,320 --> 00:34:14,120 Speaker 1: try to make on this. It's like, look, we think, 701 00:34:14,239 --> 00:34:16,399 Speaker 1: we keep thinking it's going to be checkmate. I thought 702 00:34:16,440 --> 00:34:18,240 Speaker 1: it was going to be checkmate back in twenty twelve, 703 00:34:18,400 --> 00:34:20,120 Speaker 1: A lot of people did. Harry Dent's been calling for 704 00:34:20,200 --> 00:34:22,120 Speaker 1: a crash for twelve years. Now, eventually they'll be right. 705 00:34:22,880 --> 00:34:24,880 Speaker 1: But how many more tricks stay up their sleeve? So 706 00:34:25,160 --> 00:34:29,239 Speaker 1: is it checkmate or are there more tricks of their sleeve? Well, 707 00:34:30,400 --> 00:34:32,759 Speaker 1: I think it's checkmate in a sense that they're going 708 00:34:32,840 --> 00:34:36,279 Speaker 1: to force the FED into action. Now, some of it 709 00:34:36,560 --> 00:34:38,520 Speaker 1: when it's not checkmate, is that it's going to be hidden. 710 00:34:38,520 --> 00:34:41,880 Speaker 1: It's gonna be obfuscated. They're gonna say, well, we're not easy, 711 00:34:42,200 --> 00:34:45,400 Speaker 1: sort of like they're still officially in a quantitative tightening mode, 712 00:34:45,719 --> 00:34:48,640 Speaker 1: but they injected one hundred billion dollars into the banking industry, 713 00:34:49,360 --> 00:34:53,359 Speaker 1: so they're in tightening. However, they're actually easing, so their 714 00:34:53,440 --> 00:34:56,840 Speaker 1: potential policy stance could say the same. So for example, 715 00:34:57,120 --> 00:34:59,879 Speaker 1: maybe they don't lower rates as as soon as maybe 716 00:35:00,000 --> 00:35:03,320 Speaker 1: people would think, but they start injecting liquidity into other places. 717 00:35:04,160 --> 00:35:06,480 Speaker 1: So there's a lot of games that they can play here. 718 00:35:06,520 --> 00:35:10,040 Speaker 1: And that's the point. However, back to these smarter people 719 00:35:10,080 --> 00:35:16,160 Speaker 1: are factually correct, intellectually dishonest, factually, it might not be 720 00:35:16,320 --> 00:35:20,640 Speaker 1: a pivot factually technically, but it could still be easing 721 00:35:20,800 --> 00:35:24,600 Speaker 1: in a hundred other ways. Right, And so for you 722 00:35:24,680 --> 00:35:26,480 Speaker 1: and I, we don't need to get into the weeds 723 00:35:26,520 --> 00:35:28,239 Speaker 1: on this. We just need to know are we in 724 00:35:28,320 --> 00:35:30,800 Speaker 1: easy or are we untighten? Is the Fed going to 725 00:35:30,880 --> 00:35:32,919 Speaker 1: push prices up? Are they going to push prices down? 726 00:35:33,280 --> 00:35:35,719 Speaker 1: And in my opinion, it's going to push prices up. 727 00:35:35,719 --> 00:35:37,160 Speaker 1: I've been talking about this for a year and a half. 728 00:35:37,320 --> 00:35:39,879 Speaker 1: I am an inflation bowl. Look, this isn't good. It's 729 00:35:39,920 --> 00:35:41,520 Speaker 1: not good at all. As a matter of fact, it's worse. 730 00:35:42,239 --> 00:35:44,600 Speaker 1: Having prices crashed back down would be better because at 731 00:35:44,680 --> 00:35:46,440 Speaker 1: least it gives us another chance to get back in. 732 00:35:46,520 --> 00:35:48,759 Speaker 1: It gives my kids a chance, the millennials a chance 733 00:35:48,840 --> 00:35:51,960 Speaker 1: to get back in. The problem is, I don't think 734 00:35:52,000 --> 00:35:53,320 Speaker 1: that's going to happen. I think it's going to continue 735 00:35:53,320 --> 00:35:56,760 Speaker 1: going higher, higher, higher, which sounds good if you own assets, 736 00:35:57,000 --> 00:36:00,320 Speaker 1: but it's worse for society. It's worse for most people. 737 00:36:00,880 --> 00:36:02,800 Speaker 1: We'd like things to reset. So we all have a 738 00:36:02,880 --> 00:36:04,160 Speaker 1: chance to get back in the game. It's like if 739 00:36:04,200 --> 00:36:06,440 Speaker 1: you're playing a board game and you got out or 740 00:36:06,480 --> 00:36:08,399 Speaker 1: you haven't got a chance to get back in. You're 741 00:36:08,440 --> 00:36:10,600 Speaker 1: waiting for the game to be reset so you can 742 00:36:10,680 --> 00:36:12,320 Speaker 1: jump in and play the game with everybody, or you 743 00:36:12,400 --> 00:36:15,239 Speaker 1: can get back in. But if they don't ever reset 744 00:36:15,280 --> 00:36:17,279 Speaker 1: the game, then you don't get in the game. And 745 00:36:17,400 --> 00:36:20,279 Speaker 1: that's exactly what it looks like is happening now. If 746 00:36:20,320 --> 00:36:22,920 Speaker 1: you want to know exactly what is going on with 747 00:36:23,000 --> 00:36:25,560 Speaker 1: this from a much more detailed level, I'm having a 748 00:36:25,640 --> 00:36:28,520 Speaker 1: live presentation. You can join me live hang out. It's 749 00:36:28,560 --> 00:36:31,800 Speaker 1: titled Seize the Upside of the Feds You Turn in 750 00:36:32,200 --> 00:36:34,600 Speaker 1: twenty twenty four Walls side Stepping the Market of All Tilly. 751 00:36:34,600 --> 00:36:36,239 Speaker 1: If that sounds interesting, come join me live. I've got 752 00:36:36,280 --> 00:36:37,960 Speaker 1: a whole bunch of charts and graphs I want to 753 00:36:38,000 --> 00:36:40,200 Speaker 1: show you, not just talk to you about. Go to 754 00:36:40,360 --> 00:36:42,960 Speaker 1: go dot one, Markmoss dot com, slash you turn to 755 00:36:43,080 --> 00:36:45,279 Speaker 1: join me. Not only am I going to go through 756 00:36:45,320 --> 00:36:46,960 Speaker 1: all the charts and graphs, I'm gonna answer all your 757 00:36:47,080 --> 00:36:49,399 Speaker 1: questions live, So we're gonna be hanging out. You're gonna 758 00:36:49,400 --> 00:36:51,840 Speaker 1: ask the questions. I'm gonna be answering them. Just go 759 00:36:51,960 --> 00:36:55,359 Speaker 1: to go dot one, Markmoss dot com, slash you turn, 760 00:36:55,440 --> 00:36:57,799 Speaker 1: go dot one, Markmoss dot com, slash you turn, join 761 00:36:57,840 --> 00:37:00,920 Speaker 1: me live and uh boy, that's what I got. This 762 00:37:01,120 --> 00:37:03,879 Speaker 1: is what's happening. It's happening this year. It's all going down. 763 00:37:04,520 --> 00:37:08,480 Speaker 1: I believe that it's sort of checkmate. Maybe not officially, 764 00:37:08,760 --> 00:37:10,319 Speaker 1: but the FED is going to be easy and they 765 00:37:10,440 --> 00:37:12,440 Speaker 1: have to with then do any good to put the 766 00:37:12,719 --> 00:37:15,120 Speaker 1: government out of business. Anyway, you're listening to the Mark 767 00:37:15,160 --> 00:37:17,759 Speaker 1: Mash Show talking about this topic. Hopefully that makes sense. 768 00:37:17,840 --> 00:37:19,000 Speaker 1: Let me know if you're listening on hit me up 769 00:37:19,040 --> 00:37:20,920 Speaker 1: on social media. And that's what I got. Thanks so 770 00:37:21,000 --> 00:37:21,479 Speaker 1: much for listening.