More Repo Madness and Not QE Grow Fed's Official Balance Sheet Over $400 Billion Dollars

The Fed's official balance sheet is now up over $400 billion dollars ($405.645 billion to be exact) since the end of August 2019! The Fed's balance sheet has been growing at a $25.352.81 billion dollar per week pace in the last 16 weeks since QT prematurely ended, the Fed's official balance sheet increased by $28.539 billion dollars in the last week and in the last month the Fed's official balance sheet is up over $100 billion dollars!

- Source, Wall St to Main St

These Major Market Risks Have Not Gone Away, They May Blow Up

The Fed will continue to be accommodative in 2020 due to a host of macroeconomic issues that are still unresolved, this according to Peter Hug, Global Trading Director of Kitco Metals. “I’ve got a couple of issues with the markets from an equities perspective. 

First of all, I think the valuations are a bit extended. I don’t think the market has truly factored in the Brexit issue. With Boris Johnson being elected, they are going to leave the EU, but it’s just not that easy,” Hug told Kitco News.

- Source, Kitco News

Ron Paul: Lying About Inflation Won’t Make It Go Away

Politicians are notorious for being professional liars. They lie about wars, the economy, about other politicians, foreign leaders, following the Constitution. Would it be a stretch for them to lie about inflation too?

- Source, Ron Paul

Alasdair Macleod: What Will the Developing Crisis Look Like?

Clearly, central banks will respond to the next credit crisis with an even greater expansion of money quantity than at the time of the Lehman crisis eleven years ago. The consequence of this monetary inflation seems certain to lead to an even greater rate of loss of purchasing power for fiat currencies than currently indicated by independent assessments of price inflation.

Monetary inflation is likely to be directed at resolving two broad problems: providing a safety net for the banks and big businesses, as well as funding rising government deficits. Therefore, the amount of quantitative easing, which will be central to satisfying these objectives, will soar.

The effect on markets will differ from being a rerun of the 1929–32 example in one key respect. Ninety years ago, the two major currencies, the dollar and sterling, were on a gold exchange standard, which meant that during the crisis asset and commodity prices were effectively measured in gold. Today, there is no gold backing and prices will be measured in expanding quantities of fiat currency.

Prices measured in fiat currencies will be determined ultimately by the course of monetary policy. But in real terms, the outlook is for a repeat of the conditions that afflicted markets and economies during and following the 1929 Wall Street crash. A further difference from the Depression years is that today Western governments have extensive legal obligations to provide their citizens with welfare, the cost of which is escalating in real terms. Add to this the cost of rising unemployment and a decline in tax revenue and we can see that government deficits and debts will increase rapidly even in a moderate recession.

This brings us to an additional problem, likely to be evident in a secondary phase of the credit crisis. As it becomes obvious that the purchasing power of fiat currencies is being undermined at a rate which is impossible to conceal through statistical methods, the discounted value of future money reflected in its time preference will rise irrespective of interest rate policy. Consequently, borrowers will be faced with rising interest rates to compensate for both increasing time preference and the additional loan risk faced by lending to different classes of borrowers.

Besides closing off virtually all debt financing for businesses and increasingly indebted consumers, this will play havoc with governments accustomed to borrowing at suppressed or even negative interest rates. Prices for existing bonds will collapse, and banks loaded up with government debt to benefit from Basel Committee on Banking Supervision regulations will find their slender capital, if they have any left, quickly eroded.

The world of fiat currencies faces no less than its last hurrah. Indeed, some of the more prescient central bankers appear concerned the current system is running out of road, with the dollar as the world’s reserve currency no longer fit for this purpose. They want to find a means of resetting everything, exploring solutions such as digitising currency through blockchains, doing away with cash, and finding other avenues to try to control the so-called vagaries of free markets.

None of them will work, because even a new form of money will require inflation to rescue government finances and prevent financial and economic failure. The accelerating pace of monetary creation to address these problems will remain the one problem central to the failure of a system of credit and monetary creation: the impossibility of resolving the debt trap that has ensnared us all.

Just as Germany found in 1923, monetary inflation as a means of funding government and other economic liabilities is a process that rapidly gets out of its control. Eventually, people understand the debasement fraud and begin to dispose of the fiat currency as rapidly as possible. It then has no value.

The ending of the fiat currency regime is bound to terminate the repeating cycles of bank credit legitimised since 1844. The socialism of money through inflationary debasement will be exposed as a massive fraud perpetrated on ordinary people.

- Source, Alasdair Macleod via Mises

Repo Madness Is Global? BIS Warns of Looming EU Repo Problems

"U.S. securities/“repo” finance is clearly a major source of liquidity for the markets as well as the real economy. 

Yet this Bubble Dynamic is undoubtedly global, with international securities finance instrumental to inflating securities and asset markets around the world. 

A Bloomberg article this week referenced a $9.0 TN European “repo” market. There are also large repo markets in Japan and throughout Asia. 

How much finance used to leverage global securities is originating out of the likes of Hong Kong, Singapore and Shanghai - not to mention the Cayman Islands and Luxembourg? How much global “repo” finance has been flowing into U.S. debt markets?

- Source, Wall St for Main St

The FED is About to Erase Almost Two Years of QE in a Few Months

Tis the season to be overly generous with your unconstitutional printing press.

- Source, Silver Fortune

Unelected Power: Caging and Limiting Central Banks

Sir Paul Tucker on Paul Volcker & the importance of self-restraint. In 2008 government relinquished massive power to the central bankers. 

Gold standard replaced by central banks must come with mandates of limit. Thanks for listening to this week's McAlvany Commentary.

- Source, Golden Rule Radio

Why QE is the Fed's Only Weapon Left

Julian Brigden, co-founder and head of research at MI2 Partners, unpacks the bind the Fed finds itself in as the economy approaches the end of a 10-year cycle. 

How does the Fed keep the markets going as asset prices continue to soar? Brigden explains the potential channels and methods of intervention and explores specific trades that may benefit in different environments.

- Source, Real Vision Finance

"Not QE" Announces Another Recession, Gold Whale Appears

The Fed’s mysterious repo injections of cash into the banking system at the top of the longest and most massive credit cycle in modern history already confirmed numerous indicators that signal we are entering a Great Recession. 

Now, enter a GOLD WHALE on the COMEX who has staked a staggering long position and even rolled it forward, anticipating gold to make a major move. 

Alasdair Macleod, Head of Research at GoldMoney, returns to Finance and Liberty to cut through the clutter of fake government statistics and misdirection of manipulated markets to remind us of the shocking parallels between today vs. the eve of the great crash of 1929...

- Source, Reluctant Preppers

Even Orwell Didn't Imagine the Dystopia of State Run Cryptocurrencies

Cryptos? Not necessarily all bad, they actually have a handful of great features. State run cryptos? Just another tool to control.

- Source, Silver Fortune