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The Fed simply gave out over $300 BILLION in single week.
See for your self: the Fed’s stability sheet has erupted larger, erasing over HALF of its Quantitative Tightening (QT) efforts. Once more, we’re speaking about $300+ BILLION in a single week.
Now, technically a lot of this ($164 billion to be actual) got here within the type of loans to banks. The banks should pay this again, so it’s not fairly the identical as Quantitative Easing (QE). Regardless, the important thing level is that the Fed is NO LONGER shrinking its stability sheet… as a substitute it’s printing cash. And never a little bit bit, however $300+ billion in a single week.
To place that into perspective, it’s the equal of greater than TWO MONTHS’ definitely worth the Fed’s emergency QE program that it ran in response to the pandemic. And once more, the Fed did this in simply FIVE DAYS.
What does this imply?
In the beginning, that one thing VERY BAD is happening behind the scenes within the U.S. banking system. However extra importantly for us as traders, that the subsequent spherical of bailouts/ easing/ reflating the monetary system is right here.
This received’t finish effectively.
The Silicon Valley Financial institution bailout is the Bear Stearns second for this bubble. Lehman is coming… as is AIG… and this whole mess received’t finish till the inventory market hits ranges most can’t even think about at the moment… to the draw back
Certainly, from a BIG PICTURE perspective my proprietary Crash Set off is now on the primary confirmed “Promote” sign since 2008.
This sign has solely registered THREE occasions within the final 25 years: in 2000, 2008 and at the moment.
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