Guest Post by Martin Armstrong
The unannounced meeting between the Fed and Trump was a briefing on the Repo Crisis BECAUSE the real crisis cannot be discussed publicly. I have not been getting much sleep lately. This is a very serious crisis and all the BS on TV of these pretend analysts giving their two cents is really amazing. They are making up stuff and speculating because they have no idea how the global economy truly functions and they do not advise institutions. They do not understand the risks for year-end and calling this QE proves they do not understand what is taking place.
There are too many people trying to sound authoritative when they are clueless. Yet they seem to have to say something to pretend they know what is going on when all they are doing is creating confusion. We have more institutional clients around the globe on every side than anyone would imagine. We are in the front row with real live clients in the middle of this issue.
I appreciate the severity of this crisis. Requests to attend board meetings I have only been available by phone. I simply cannot fly all over the place. I really wish I could just come out and spill the beans, but this situation is too critical at this point and I fear that if someone does not blink here, we are headed into a global political contagion.
This is why a deal had to be tentatively arranged with China on trade. There are politicians out of the loop and this whole thing which is way too far above their heads to even grasp an understanding.
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That sounded like a cry for help.
Was there a point to this article? I certainly couldn’t find one.
This REPO business is cover for giving the banks funds with which to purchase assets once they pull the plug on the economy.
REPO debt is supposed to be liquidated over night or within a very short time frame. Ask yourself why the funds from the repayments aren’t funding the next nights requirements. The answer is there are no repayments thus requiring more funny money injections.
This is a giant swindle done in the open. It is the last hurrah before the collapse. The 1% know full well that this fiat system is ending. What they want to do is reintroduce a gold standard reducing the value of the dollar accordingly so they can then convert their fiat into a gold backed currency by edict. Their trillions of what would be worthless paper gets converted into gold backed assets.
Then comes the hording of those assets as the dollar hits hyper inflation wiping out the average person and leaving the wealthy in full control of the worlds resources. The gold backing is just an interim step to allow the wealthy to convert their excess funds into a tangible asset. After that the currency will again be debauched leading to it becoming worthless.
Read my comment above.
This isn’t an essay, it’s a meltdown.
Can’t you read? He knows more than anybody in the Universe. He’s the Uncle Rico of investment advisers. The whole thing is way too far above everyone’s head to explain. But I bet he could throw a football over those damn mountains.
Yes, I can read and it says nothing.
It says we are all totally screwed and the author is completely terrified and exasperated that no one is speaking about it much less listening .
Precisely. Martin Armstrong is a cut above industry ‘sages’. Watch the documentary on this gentleman entitled … “The Forecaster”. Very eye opening.
It has spun out of their control and comprehension.
Where is Timothy Geithner when we need him?
Oh yeah, he’s staying up late doing his taxes.
+100 for a Napoleon Dynamite reference.
In this week’s Liberty Report Dr. Paul talked about him sensing blood in the water also. That’s 2 very savvy guys. We may be at a tipping point.
It’s not Martin A. that has been predicting this crisis for years, rather his computer program he’s been developing for some 30 years.
This is me these days, I wonder what the hell happened, how we got here and have no clue as to how to extricate myself from the upcoming mess…..I’m merely along for the ride since I can’t exit or stop the train…
There isn’t enough gold on the planet to be able to go back to a gold standard. This is the derivatives coming home to roost.
My Girl,
There is enough gold. The question is what to price it at per oz. Gold is the only asset that can be priced at any value/price and have no effect on any other market, institution, etc.
“Ask yourself why the funds from the repayments aren’t funding the next nights requirements.”
They are paying the banks slowly for their futures losses to keep them solvent on paper….
“Their trillions of what would be worthless paper gets converted into gold backed assets.”
They are already buying gold and have been for 3 years. Over 52% of all gold purchases are now by central banks worldwide. Their biggest fears are coming true. I actually see a debt jubilee as an actual crisis fix and not the banks buying hard assets with their backing for they will cause a revolution. You cannot have a 2008 and a 2020 that close together. These types of crashes are 4th turning crashes and cannot be weathered by the same generation within a generation without bloodshed. They know this and thought Hillary would be in and have us disarmed by now. In short they knew the end was coming and we are f**ked but they thought they would be protected by disarmament. They were wrong. Dead wrong and now they are scrambling for a fix and fast.
armstrong has been talking about this quite a bit–
as i understand the repo market,these are supposed to be overnight loans between banks so as to maintain liquidity in the financial system–
apparently,banks are in far more trouble than the public is being told & the banks are afraid to loan to one another,which is causing the lack of “private” lending in the repo market,thus causing the fed to step in & make these loans–
the latest idea is that the big 4 banks pulled funding from hedge fund leverage and bought treasuries with the resulting cash in the hopes of forcing the fed to buy those treasuries from the banks at a higher price while creating a whole new QE cycle of risk free profits for banks.
Makes no sense….if a bank loans to another then seeks a loan that is a paper Ponzi scheme. The feds back these “loans” but in reality each bank is simply getting a fed loan and now they cant pay it back nor the interest so the feds must up the loans. Similar to a smart wealthy guy gets a loan then another and so on until he is the largest debtor to the bank and then one day he loses his income and cannot pay. The bank loans him the money to pay the interest back to the bank u til the guy gets his income back. If he ever does all is ok. If he doesn’t the bank, the guy and all depositors crash and burn.
From Investopedia:”Repurchase agreements can take place between a variety of parties. The Federal Reserve enters into repurchase agreements to regulate the money supply and bank reserves”.
My guess is bank reserves are again out of whack; said another way, banks probably are skating on thin ice. There are other, more traditional ways for banks to meet their overnight reserve requirements-but for some reason repos are now the weapon of choice. Could be because lots of gov’t securities are involved and supply for same may be overwhelming demand. Plus, there are more traditional ways for the Fed to regulate the money supply and bank reserves.
I hazard a guess that DJT’s meeting with the Fed-if true-is a clue that things are not going well in the monetary side of government.
I’m trying to do some tech support type debugging for this sites confirmation emails. The email to confirm my first post was mangled and there’s a pattern to how they are mangled.
How many posters to this article are getting mangled emails that can’t be used to confirm the subscription?
What operating system and version are you on?
What browser and version are you on?
How many posters are getting properly formatted emails?
What operating system and version are you on?
What browser and version are you on?
I believe the error is produced server side but want to get some information on the client side.
Why all the questions? Solutions are obvious.
I am a ghost and encrypted and no subscriptions….
I did work in the financial markets, but I will say not sure what’s going on here. There is one thing that is scaring the bejesus out of me. The FED is apparently expanding its balance sheet again, to the point where it will go above the previous $4 trillion. Why the F*** would that be necessary at this stage of the game with the US economy going well, GDP growing, employment growing?? 2+2 are not adding up to 4 folks
The economy is not doing well. It’s all BS.
And the real problem that isn’t said is very simple.
There is too much debt and not enough currency in the system to pay it. All the rest is just smoke and mirrors.
many possibilities including the bailing out of Deutsche Bank (and maybe Commerzbank) due to overwhelming derivative calls which they could not meet. reassignment of those endangered derivatives to other banks to include a Govt. guarantee to cover any losses. or perhaps the Fed is even taking derivative contracts on to the Fed balance sheet?
We will only know AFTER it has happened
^^^
Nailed it
Peter Schiff called this about a year ago that the FED would stop tightening and go to QE 4 Looks like he was right again
How many here believe that we will now give up gold that was being held for other countries?
What gold? The bulk of it is gone, the US’s and everyone else’s in US vaults.
They may actually find gold plated tungsten bars if they ever allow a real assay inspection.
Which they won’t ever allow obviously
My contacts say that it’s Deutsch Bank that’s been bailed out secretly and I wouldn’t be surprised. Look at their share price graph? Everyone knows that they are in trouble and a sudden rise for no organic reason; someone knows something:
https://www.google.com/search?client=firefox-b-d&q=deutsch+bank+share+price+graph
Wow Pete, 2 for 2
^^^ nailed it, yes it is Deutsch Bank unraveling and they are all chipping in. Look at banks worldwide. The negative rates are a bail in by the people. This is too big to the world, to fail. Makes 2008 look like a first grade noob trial run. This is very serious. I have a significant put option chain on DB. I feel like Dr. Barry as to why it has not paid off yet….now I understand. It will be collapsed via an international breakup with dozens of banks buying its parts like piranhas but they will all be buying toxic shit and hence the fed and other central banks are gearing up the banks flush with cash to take on that toxicity. I fear they will make it to where I lose my ass being right. The feds cannot go interest rate negative so they chose repo…..
Bang on Prof, don’t fight the FED! They have big guns and we haven’t seen nuthin’ yet!
Put on call options on the S&P 500, it’s going to the moon when the FED gets going, IMHO, they just can’t let Deutsch go like they did Lehman; they are a G-SIFI with special protections.
Oh, BTW, It’s Dr Berry….
The more this goes on, the less the lie about “Fed Independence” can be maintained.
They need to lie better. I would think they will at least hold things together until after the election.
here’s a short article & primer about the repo market–
it talks a bit about the 4 banks that credit brought up in his comment–
bottom line,as most have mentioned or alluded to,is that the economy is not healthy–
https://www.investmentwatchblog.com/four-big-banks-are-at-the-root-of-problematic-fed-repo-operations/
Great link, thank you TampaRed :-))) and the comments are great!
Appears to be part of an intentional effort to destroy the FRN.
It is.
https://www.sott.net/article/425573-IMF-working-towards-banning-cash-payments
This is their strategy and if it fails there will, must be, a debt jubilee. The only way to keep it going or start over
So he could give them a check for 738 billion dollars.
Wont cover jack….they need 70 trillion HSF…..not kidding
I will spill the beans then….
China has been secretly selling our bonds many different ways. Open market is one. They have also been bartering their purchases for oil to negative interest rate countries that are our allies, swapping their UsA bonds for the oil. Russia and china and Iran have been buying oil in gold and other currencies other than the US dollar.
The banks have been caught with their pants down in the derivatives trades, especially futures. Hogs worldwide have been slaughtered reducing the world hog population to 52% of last year; In the entire world due to the epidemic of swine flu. The crops, due to drought and floods have caused massive bank futures losses. The banks lost their asses with the depositors safest money and the fed is doing another bailout. Trump cannot, nor can the feds or banks let the citizens know for it will caught riots in the streets this time as well as completely destroy Trump, shoeing in Bernie, the anti wall street anti banker. Trump is working with them because the enemy of my enemy is my friend. The enemy right now is the mother of all currency crashes taking place but they are hiding it trying to fix it. If they fail you will wake up one day to $25 loaf of bread prices overnight, literally. Your world is gonna be turned upside down. Even China sees it and is willing to deal now. Nothing brings enemies together like the end all, of everything. Nobody wins. To get back to normal enemy status they must work together to fix this in secret and get back to their “normalcy”.
Armstrong could not have issued a more dire and blunt warning. This guy works for the little dirt people and even he is too scared to spill the beans. Not even in his paid subscriptions…..he realizes people would flock to his newsletter but be paying him in fiat worthless dollars so there is no benefit to him to spill the beans. Only try and help jerry rig a fix. And pray. Shit is hitting the fan and like always we are the last to find out. If you do not realize the stops have all been pulled to crush Trump, this is just one. But they did not realize this ends everyone not just Trump. Wait until the others hit next year. All I will say right now….please listen and be prepared. The worst you can imagine is coming……many of you surely have creative imaginations, and even you will be shocked.
Great stuff, Prof, thank you, and you are the only one I know prepared to shout it out, well done. I think many are misled by the various types of debt and the way it is treated.
An example of using the term “debt” in a misleading way is in regard to mainstream economists’ constant reference to Government “Debt to GDP ratios”.
Putting aside the fact that Government bond issuance is very different to other forms of debt, conventional economists continually compare total government debt to just one year of GDP. That is not helpful because it would make a lot more sense to compare total Government debt to fifteen or twenty years of total GDP. Why? Because the maturity average for a Government’s Bond issuance program may be fifteen to twenty years.
So a Government “Debt to GDP” Ratio of 100 % as is so often stated becomes just 5 %. Let’s look at the US situation —
$ 22 Trillion/$ 22 Trillion = 100 %
$ 22 Trillion/$ 440 Trillion = 5 % (not so bad after all if looked at over 20 years)
Then there is the matter of domestic government “debt” and foreign government “debt”.
US Government debt is comprised of foreign government holders and domestic holders. Foreign government holders own $ 6.2 Trillion of the $ 22 Trillion total which is almost 30%.
Infra-governmental holdings are $5.87 trillion. If we net that out to zero because the government owes it to itself, then total US government debt falls to $ 16 Trillion.
If we then take away the foreign debt, the result is about $ 10 Trillion of Government Debt owed to private domestic investors — most of whom are pension funds, banks and investment funds.
Thus, the truer state of affairs is about $ 10 Trillion of US government debt is held by the US private sector. Thus, the US Government Domestic “Debt to GDP ratio” over 20 years is really just 2.27% ($10 Trillion/$440 Trillion). So, the point is that the FED has lots of room to QE4ever without blinking an eye.
This why I and others advise: don’t fight the FED. I am sure your assessment is correct but the outcome might be uncertain at this time. They will try everything to keep the system going, so as you say, expect big things in the 2020s.
Peter, you are on a role. Three homer’s! Comparatively to other nations and your correct assessment regarding debt we can easily go to 70-80 trillion deficits. People do not realize this. That does not even include the ability for the govt to inflate the debt away. Still remain concerned with derivatives and banks practices though.
Many thanks Prof for your kind words – we seem to be on the same page but most, even bankers and so-called economists, miss the point. It’s nice to meet a fellow traveller. I have tried to keep it simple in my book but the footnotes give more detail for those wishing to know.
I agree that the mega trillions of derivatives could be a problem if a counter-party fails but most just net off. The banksters’ practices are definitely one for the pot which might well boil over before they can get the regs in.
I am new to TBP but have been watching events with a magnifying glass for a very long time. With no disrespect to you or Peter it seems neither of you realize this is all orchestrated (apologies if I am wrong). This is in no way an accident that is now requiring everyone assistance to get it back in order. The ones who created this will not “try everything” to keep the system going, no this is escalating according to plan. The worst we can imagine is definitely going to happen and there is no possible way to avert it. The most horrific storm the world has ever seen is upon us and it’s warnings should have been heeded for decades but people couldn’t hear the thunder for the party. I just called a man to read the above comment by Prof. of which I appreciate very much. I asked said man, 62 years old, what he was doing, he replied: “watching football.” I just quietly hung up the phone.