The Fed Has Won, But What’s It Mean To Your $?
Our info coming directly from REPO traders remains unsure to what extent the FED had to pour in money to prevent short-term interest rates from rising. The analysis which is still mostly calling this Quantitative Easing is just laughable.
The economy is doing well in the USA and unemployment is back to the lowest levels since the ’60s. There is absolutely no basis to “stimulate” the economy.
We can see that the Inverted Yield Curve going into the summer was the warning sign that confirmed our forecast we faced a liquidity crisis beginning in September 2019. Like the weather, everything is moving to the extremes in both directions.
The collapse in the yield curve to invert has ABSOLUTELY nothing to do with a pending recession everyone was touting. The inverted yield curve was being driven by a panic to get out of the Euro. The Euro has been destroyed as a reserve currency because other central banks do not want to hold Euros with negative interest rates which they see as a tax on their reserves for the benefit of Europe.
We can see that the REPO Crisis is not about QE, but trying to prevent the short-term rates from rising. It had nothing to do with taxes and what everyone was attributing it to back in September.
The Repo crisis has been an ongoing crisis because the Fed is trying to prevent the inevitable – the rise in interest rates back to normal levels which reflect risk!
Some people have asked to please explain what this has as an impact upon the average person?
What I am describing is that the trend is back to interest rates rising and this is what the Fed is trying so desperately to prevent. This is all about manipulating the interest rates and fighting against the free market.
The experiment with negative interest rates to stimulate the economies of Europe and Japan have completely failed. But the respective central banks are now trapped. They have utterly destroyed their bond markets, and in the process ensuring their own demise. As they try to maintain negative interest rates, the capital flows are working hard to undermine both european and eastern central banks and the Federal Reserve is caught in the crosshairs.
The REPO Crisis is NOT about Quantitative Easing, it is about trying to PREVENT interest rates from rising which will blow-up the world economy.
Here is my point:
We have to be very careful and attentive, all of what you read and hear by the media now it 100% about “self preservation”. Stay close to your charts and signals.
The vast majority of analysts commenting on this have NEVER advised institutions. They are clueless with respect to what is really taking place. In many cases, even the institutional traders are people who have their coffee cups constantly refilled from beads of sweat pouring from their forehead from what is taking place. Even the COT managers are confused.
We have to be very careful and attentive, all of what you read and hear by the media now it 100% about “self preservation”.
Stay close to your charts and signals as the vast majority will miss the slingshot move up after the coming false crash.
InterAnalyst has been serving over 500,000 investors globally since 1990. Authoring hundreds of financial articles, publications, and almost a million buy and sell trading charts. Mr. Nespoli’s Premier Bull & Bear blog is been read by more than 500,000 investors globally.