The great reset is underway.
And if I really were being honest with myself and with everyone out
there, I would say there's a better than 50% chance in my mind that
this is all engineered, engineered to find a villain to do the dirty
work for the FED.
Because the FED does not want to be responsible for blowing up the
entire system.
We haven't really even seen Market panic yet.
I mean, the selling has been mostly orderly if that's what you want to
call it.
But yeah, I have the FED officials walking, the ultimate tightrope.
I mean, look in addition, to valuations being off the charts and
inflation that multi-decade highs, you have government debt and
deficit spending has never been higher and you put it all together.
I mean, look, I think before the lows are put in
We're going to see some serious disorderly selling a disorderly
sell-off, and this comes on the heels of supply chain stealing chaos
and world.
Economy's, still being forced to shut down.
Like in China, you got War, you got conflict and you have an economy
that shrank last quarter by 1.4 percent.
And you know, the question that everyone wants to know is the Fed
going to be forced to come in and comfort.
Markets more than they already have.
Once things really get crazy.
I hear people talking about equilibrium at 2% And I'm a, what are they
talking about?
Equilibrium at 2% when inflation is at 9%?
You look at the remarks that Jerome Powell gave just the other day, at
the fomc, meeting.
His comment was, I did inflation is much too high and that the FED is
moving expeditiously, as we said to bring it down, and he said, we
have, Both the tools we need and the resolve it will take to restore price
stability.
So I don't know what tools he's talking about.
They have the federal funds rate at three quarters of one percent.
If they go backwards to ease and accommodate your bringing the world
Reserve currency, perilously close, or actually nominally - and we've
talked Ad nauseam of how this rate is actually real - by 7% or
whatnot.
Eight percent.
But to bring the world Reserve currency nominally - is a tool that I
don't think he'd be willing to pull out.
So when he talks about tools, I'm not exactly sure what he's talking
about other than reversing course, which would be the same thing as
eating crow and losing all credibility.
And when he says these things that they have the resolve in the tools
to do it.
I find it ironic that moments later.
He ruled out the possibility of raising rates by more.
More than 50 basis points at a time.
Like 75 basis points.
That what we're was bantered around for a while.
So, you know, the joke is basically, they'll do whatever it takes to
fight inflation except for doing what it actually takes to fight
inflation.
This is, this is the problem.
And and this is why, you know, we're going to reduce our balance sheet
in June.
What the heck are they waiting for?
So, you know, the question is on everybody's mind.
Is this real or are they going to do an about-face?
Phase re accommodate when things start to blow up, we go back, two
thousand Seventeen or eighteen.
The last time we saw the 10-year note, really above 3% and I may have
been there one other time, but in 18, I think is when it happened when
they tried to raise rates at that point and tighten, everything
started to blow up.
Now, we have we haven't seen that happen yet and the yield curve at
the moment is not inverted.
Although it probably will start to invert or at
Over three percent on the five, the 10, and the 30-year treasury, so,
you know, we're at that moment right now, but here again, we're still
well below the rate of inflation.
And so in order to fight inflation first and foremost, they need to
get serious.
They need to raise rates to a level.
That is not just fooling around with 50 basis.
Point increases or 75 basis point increases, which you know, still
All brings us well below the rate of inflation.
And when you talk about selling off the balance sheet to the tune of
60 or 80 billion a month.
Why are they waiting?
So I guess what I'm getting at is that I don't see Fed, chairman
Powell Having the courage that Paul volcker did to really get tough on
inflation.
And this is why I focus so closely on what's happening to the
petrodollar to the relationship with Saudi Arabia Nigeria.
What's
Coming with Russia, the kicking out of the Swift.
To me.
The real issue with interest rates comes when the world grows, tired
of the dollar, and of the treasury.
And look, you can see it happening with Japan already.
Japan is selling off their treasuries.
They're the biggest holders of it.
They're selling it.
Not only are they selling the treasure is because they are losing
value in the face of rising rates.
But the dollar for some crazy reason, I guess Branch out.
Someone think it's crazy with this milkshake Theory.
The dollar is
Roaring won all four on the Dixie, you know, so the Japanese are
getting less for the converting their dollar and the yen into dollars
and they're losing as rates rise.
So the question is, who in their right mind is going to buy the US Bond?
And I don't see anyone doing it, and I don't see the FED getting tough
enough on inflation to make a meaningful difference in where we're going.
I think what they're trying to do.
However, is pushed things so far down the road that the market does
the heavy lifting for them.
Anyway, you look at it done again.
I agree with Rick rule, you are going to see great volatility.
And if you look at market, sell offs or Market, blow offs in either
direction up or down there very, very, very frequently accompanied
with or you see prior to the blow off for the take-off.
You see great volatility and that's what we're seeing right now.
All the way across gold.
Silver cryptocurrencies, equities.
Everything is volatile.
I will say this that precious metals seem to be holding their own.
They're not really getting as club that some of the other indices are
and but the bottom line is where I think we are heading.
He or she who loses least wins, and I would rely upon gold and silver,
which are woefully undervalued in relation to financial assets, rather
than banking on the Fed.
Because if they make a wrong turn here, which you know, who's to
believe that, they'll make the right turn.
They haven't been honest with us forever.
They told us that you know, the subprime crisis was contained in 08.
They told us inflation was transitory and yet they continue to add to
their balance sheet.
Once they told us that it wasn't transitory.
They tell us they're going to sell off their balance sheet, but not
till June, the tell us they're going to make meaningful increases in
the interest rates yet.
They said they're not going to go above 50 basis points.
Look, the bottom line is the fetish
Wrapped.
And I think when the market realizes, and I don't think the market
figured it out yet.
The market realizes that their trap things are going to get really,
really, really interesting.
And I think volatility will be the buzz word as well counterparty risk
for the second half year of 2022.
That's the thing.
I mean, what can they really do?
And mean, if anyone really honest with themselves, if they really
wanted to fix it, they'd stop screwing around with 50 basis points.
And let go 500 basis points or six hundred basis points.
They'd stop.
Around was saying we're going to sell our balance sheet, a pair of
down or start to tighten in June and they would have done it last
meeting and the meeting before, if they were really serious about it.
Once they admitted, it wasn't transitory.
Why did they continue to add to it?
They realize the market cannot handle the medicine.
They understand that intuitively, and I think they're jawboning.
And I really think if you were to say it was this all set up, are they trying?
To blow up the system and and and, and create a villain.
Yeah.
I mean I could make a story where this is all set up and and they're
trying hard to blow up the system and they will blame the Saudis, the
Russians and the Chinese in the brics Nations who move away from the
dollar and find a new currency to settle energy and it won't just be
the dollar.
When that moment happens in all those dollars come flooding home.
It does all the dirty work for Powell.
They don't have to be the
Ones. That
The rates, it was those awful, brics Nations that gave up on the
dollar and they have a villain and because you can tell by their it's
like don't do as I do do, as I say well with them their their actions
are betraying their rhetoric and that's the bottom line.
The FED is not getting tough on inflation.
And anyone who thinks a 50 basis point, increase in rates went to 75
basis points, not even one percent on the federal funds rate.
3%, on the 10-year Treasury.
If anyone thinks that's getting tough on inflation with nine percent
inflation.
I have a bridge to sell you.
It's not getting tough on inflation and, and you can see the
ramifications look by raising the federal funds rate by just 50 basis
points. Look at what's happened to the mortgage rate, if they really want to
get tough.
I think, you know, they can start selling their trillion dollars in
mortgage back Securities, dumping them.
Onto the market.
Watch what happens to interest rates.
Watch what happens to the Arts?
The mortgage rate.
Watch what happens to the to the house.
Market, you know, the commercial real estate market.
These are, are things people really aren't factoring in.
And I think a lot of people think that the FED will come in and make
this all better in a soft landing and they're all going to be caught
off guard, woefully off guard.
And for those people out there lamenting about how gold and silver
have not performed the way they should have the way that intuition.
What tell us, remember what I've always said about misdirection.
They are misdirecting because Rising
Gold and silver exacerbate, the, the, the impetus, or the
understanding that that the emperor is not wearing any clothes.
It's the wizard behind the curtain and they don't want to pull that
curtain back, because Rising gold and silver really signaled, the
Frailty of the whole system.
And I think it's it's not a rush to liquidity.
It's not a rush to look what it is at all.
It's damage control and it's getting harder and harder and harder and
harder. Order to do that.
I will say this, they're damn good at it.
They're damn good at creating a reality through price and it's
amazing.
They've been able to keep the price of gold and silver down as long as
they have.
And you wonder why aren't big institutions and and big Industrials and
and Sovereign governments, not just draining comex, and maybe we'll
cross that Rubicon here.
Real soon.
Once it becomes painfully obvious to everybody that the FED is caught
and, and
If they reverse course, if the markets really start to throw up, if we
get to that point where it really starts to talk to Crescendo into a
disorderly sell-off, not an order, this all up in a disorderly sell
off, then I could see them reversing course and when that moment
happens, the world knows that they are going to sacrifice the dollar
in favor of the economy.
And this is the Trap that they are in right now and they're very
reactionary.
I don't, I don't think at this point, there's anything.
That they can do proactively other than get tough on inflation and
blow up the system and like Paul volcker did.
It's just a different world today with a mountain of debt that we have
versus 1980.
It was easier to do in 1980.
Whereas, right now with a 30 trillion dollar debt, not even talking
about the unfunded liabilities exceeding, 100 trillion, you raise rates.
And you you you bankrupt, future Generations, you bankrupt, this
country, you blow.
Oh, up the economy.
There's your great reset.
Is it going to happen?
Don't know.
But if I had a gun to my head, I would say the great reset is under
way.
And if I really were being honest with myself and with everyone out
there, I would say there's a better than 50% chance in my mind that
this is all engineered, engineered to find a villain to do the dirty
work for the FED.
Because the FED does not want to be responsible for blowing up the
entire system, even though it's of their own making.