Purchase of US Treasury debt securities in the amount $24 trillion indicates the approach unprecedented crisisaccording to Gold Switzerland.
For the past two years, Gold Switzerland has been practically screaming that “the bond market is what’s going to break” and that when it finally breaks, the markets will crash. And this will be followed by tightening control by the very politicians who caused the crisis.
The disaster in the bond market
According to the Swiss banking house, the time has come to face another crisis in the bond market, to survive another Titanic. As Egon von Greyerz has warned over the years in general, and this January in particular, fears of bank infections will be realized, leading to another domino effect. The repo markets in 2019, the collapse of government bonds in March 2020 and the gold price explosion in 2022 have already (and clearly) shown the way.
None of these events was a fluke, a black swan, or a market aberration. Rather, they were credit events, the consequences of regulators’ blindness, economic ignorance, and ignorance of even simple mathematics. Otherwise, according to the most official people, everything is in order … But, as Goebbels once said, “the bigger the lie, the easier it is to believe.”
If you have any doubts about this, just remember the unusual ignorance of Janet Yellen during her recent speech before the US Senate. She literally did not know the mathematics of her own department, nor the growing danger of a US budget deficit. But Yellen is not alone. It was preceded by Greenspan, Draghi, Lagarde.
According to Gold Switzerland, it is very worrying that the most important bond in the global financial system, the metric by which the safety and liquidity of banks is measured, derivatives markets are “insured” and countries hold (>$7 trillion) in reserve, is suddenly losing its luster and confidence.
US Treasuries are paramount…
However, unfortunately, after years of propping up unsustainable levels of debt and US inflation exports around the world, no one trusts this all-important Treasury bond anymore. In fact, Uncle Sam’s famous IOU is not a “no risk” promise, but rather an objectively distorted “no return” symbol. Let’s just look at the unprecedented volatility in the US market in recent days.
Last week, for example, liquidity in US bonds (and German bunds, by the way) dropped like a stone, causing a ripple effect around the world. On Monday, 2-year US bond yields fell overnight to levels not seen since 1987. On Tuesday and Wednesday, the level of volatility exceeded the levels of the Great Financial Crisis of 2008.
As Bloomberg’s David Ingles confirmed, last week’s extreme volatility and 2-year dollar returns saw a 3-sigma move that MIT mathematicians say can statistically only happen once every 50+ million years. in statistics, the standard deviation, also denoted by the Greek letter sigma s or s, is a measure used to calculate the amount of change or variance in a set of data values).
Something big just happened…
And yet, because of the shocking statistics, many economists, not central bankers, have been warning throughout 2022 that the bond market is the one to watch and “protect”. In their opinion, the bond market, under the pressure of monetary tightening imposed by the Fed under the chairmanship of Powell, dressed in Volcker’s spiritual “skeleton”, will eventually “break”, which happened.
Finally, Gold Switzerland also reported that the liquidity crisis in the US bond market threatens to explode the global markets for banking services, currencies, bonds and risk assets. But Hemingway said it best: inflation, currency destruction and war.
So, instead of following politicians’ empty words, hedge fund economic prejudices, or even the so-called “book talk” of golden-feathered Swiss, let’s turn to Hemingway’s dad, who never studied applied mathematics or aspired to a post in Washington. Remember, Powell told us that inflation was “transitory.” It wasn’t a mistake, it was a lie. Powell hoped to “hack” real inflation by openly pretending to fight it. His real goal in raising rates in 2022 was not inflation (which he needs), but to have something to cut when a recession, which he also redefined for 2022, becomes imminent.
And this recession, friends, is in full swing.
Given that no country in history has gone through a recession with a strong currency or rising interest rates, and the fact that the current bond market is literally screaming for the need for trillions of liquidity, there is no other alternative to avert this crisis in the coming months and years but. .. new QE or QE-like mechanisms (eg repo games, bank bailouts/deposits, discount loans, cash swaps, etc.). Also, more scrutiny is to be expected… CBDCs, i.e. Central Bank Digital Currencies, open the door to the point where, in the name of “crisis”, you will need to “take some money or control” to save yourself.
“But for those who seek to promote their personal vanity, heritage, power and shattered narratives, freedoms… Je t’accuse (“I accuse”).
For those central bankers who believe that unprecedented levels of debt can solve their own already unprecedented debt crisis: je t’accuse!
For those unelected government officials who fly environmentally toxic private jets to and from Switzerland to use climate change narratives to build personal power and political influence: je t’accuse!
To the gun lobbyists, the closeted neocon donkeys who incite war and drive young lions to their deaths instead of aggressively and honestly seeking peaceful solutions: je t-accuse!
A media run by boards of directors whose highly paid but well-educated “leaders” promote propaganda political narratives rather than objective facts: Je t’accuse!
To those who are willing to sacrifice personal freedom for security, who lie about everything from transient inflation, the definition of a recession, honest inflation figures, unemployment, even the true origin of a global virus or the true effectiveness of big pharmaceuticals: Je t’accuse!
As for the rest
Stay informed, but don’t be silent, don’t despair, don’t be numb and don’t be afraid,” concludes Gold Switzerland.
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