In response to a discussion on the supposed “Stealth QT” going on with Bank Repo market. Essentially this means Banks are repurchasing bonds (and according to some sources the Fed is selling its US Treasury Bills / Bonds in this market… further research is required here, but here is where my mind goes on how the economic levers move and what gears they turn with a bit of game theory forward induction for each of the major players here (Banks, Central Banks, Investors).
Nick: “If the fed starts real QT everything implodes faster than you can imagine. I mean every bank on earth is insolvent within 6 months. (imo). This isn’t a real viable option. They will bring rates to negative.”
Yes I agree this is the most probable scenario (Fed will not tighten)… and it’s my experience that the world typically just keeps on keeping on with most fears finding a solution… but at the same time I think it’s possible this “Tighten” scenario could be the plan all along thus why they made Corona virus…
Inserting not-so-outlandish conspiracy theory ideas…
No-so-outlandish Conspiracy Ideas
“They” have a way to keep us from traveling, possibly a way to track you with nanobots in your vaccine, a way to kill off tons of the population (new variant of the virus or new virus), a guise on which to blame it, so many new technologies for supply and logistics (Amazon, drones, et al), a booming population and a rising China that will likely be unstoppable as the world power. They’ve done so many evil things in the past I don’t discount this as a possibility to be all part of their evil plan: ruin the world, and leave all the resources intact for far less people.
Sound crazy? It’s possible. It’s been about 100 years since we’ve seen some really bad shit happen in the world and our generation just thinks things like this can’t happen. The monetary system is broken, and we all know it. Why wouldn’t they tank the new unstoppable way to manage the new world (crypto) so they can buy more of it? Even if not because it’s a real threat, the central banker coterie love to trash asset prices so then they can buy them on the cheap. They may just abandon austerity in favor of an all out monetary war on their own (old) currency so much to cause it to break and crypto to tank one last time. They then use all the printed money to buy it in a blood bath and then now that’s theirs too. This may have already happened last year… What’s great about BTC for them is they will have a permanent lock on a share of the new yardstick of value. If the US cohort of central bankers can grab it before the Chinese then they can make that their currency, and have supreme dominance over China. Even if they don’t intentionally do any of this, I believe the system (USD monetary system and all of fiat monetary systems) will eventually break, and crypto will go through a pain cycle again as everyone flees risk asset classes into the exact asset that is becoming worthless — cash. Then they realize what they’ve done (traders knew it all along) and they buy back all the commodities and crypto along with it, giving crypto a V shape recovery from the panic. It will be a depression, and still though, but like none we’ve ever seen because no one will really know what is the safe asset.
QE and a Fed / Central Bank War on Crypto Scenario
This is my one true fear for crypto. I do worry that although they can’t kill it they can seriously hurt liquidity. I don’t think this is a likely scenario unless crypto gets too big too fast. The Parable of the Boiled Frog — can we please boil that frog (The Fed). Don’t turn the heat up too fast, and maybe they will boil themselves. The private owners of the Federal Reserve Bank and its legacy families and all of those lucky enough to be in this inner circle around the world — the masters of humanity behind the curtain — will do anything to lose this power over the world. If you haven’t seen ALL of the Zeitgeist movies, you need to drop everything and watch them.
“Banks are more dangerous than standing armies.”
- Thomas Jefferson
I want to add more quotes here, but will have to come back for an edit because I need to get on with my day… watch the movies. Sufficed to say that our Founding Fathers set up this country the way they did for just this reason. They knew of the inherent tax on the colonies by banks.
The equivalent of the Bank of England (BOE) back then wanted to impose this monetary (money printing) tax on the colonies. It wasn’t a tax the way they teach you in history class, it was inflation. There are writings that show the invention of the colonies own non-inflationary currency was what spurred the British to wage this war on the colonies to make sure they stayed in debt to England.
The Eternal Crypto Bull Scenario
In this case, the trend of worsening bond prices just goes so slow that crypto keeps going and bond prices will eventually trend sideways then downwards (yields rise, interest rates rise), and crypto just keeps grabbing market share and we move into an era of perhaps new tech and new projects make higher yields bearable? I don’t know I need to really think this one more thoroughly…
How could this happen? We have a case where the general public stays away for the most part and the CBDC idea gets some traction to distract people from the truth, then perhaps this won’t happen.
The Fed is like a cigarette company. We know they are terrible for people, but they are allowed to exist and their subscribers / users are addicted and they pay bribes to the government officials to pass laws that keep them around and old dogs (consumers) don’t learn new tricks. The Fed continues to prey on its unsuspecting victims stuck in the legacy system and they leave crypto alone because it stays like a pesky ankle biting dog for years to come… this doesn’t mean it doesn’t 10x or so still… just they don’t try to kill it. Perhaps they see it as a commodity and it stays that way. Perhaps one reason why is if it doesn’t replace currency / become money - so in that case perhaps they view it doesn’t pose any more of a threat than gold does — or any commodity for that matter.
