The Ticking Clock on US Treasury: Unveiling the Near-Failure Auction and Its Implications - Mark Moss Show

this narrative and they are calling for the endgame. In the endgame could be coming in the next ninety days. As a matter of fact, we have a chart that we are watching that predicts when this end game could come. That endgame is when, yes, the government runs out of money. We have a failed treasury auction, and even worse can happen. Now, let's dig into all this. What actually happened last week? How bad is it? What is the trend showing us?

What is this chart that we're watching, What happens in ninety days that could cause us all to fall apart unless some big things are happening and done, which I think they will. Of course, I'm an inflation bowl. I'm gonna explain to you why all of that works. What's the big news here? Right off the bat, The big news is that last week we saw the US treasury auction almost fail, and so what does that mean. So

the government is spending more than they're bringing in. You know that they finance that through deficits, the deficit spending. There is the amount of shortage that they have, and they finance that through borrowing money. The way they borrow money is by selling bonds, So then people have to come buy those bonds. Now, prices are always the equilibrium of supply and demand. So if there's more supply, if the government's trying to sell more debt, then there is demand,

then there are buyers. The price has to go up to enhance entice the buyers. And that's exactly what we saw and it was catastrophic. As a matter of fact, it was the worst treasury auction that we've seen since twenty eleven. And the treasuries, what the government had to pay went up up so high that it created a

massive tel I'm going to break this down. And it was so bad that the credit rating agencies Moodies came out and move the sentiment of the government down to negative, citing the very fact that they have unsustainable debt and they can't afford it. As a matter of fact, we saw Moody's, which is the one that did this. They lowered its outlook on the US credit rating to negative. It went from stable to negative, citing large fiscal deficits

and a decline in debt affordability. So it is not crazy people like me on the internet, on YouTube and podcasts seeing this thing. The credit rating agency says, these large fiscal deficits, the amount of debt that you're short every year, and the declining in the affordability of your debt are major problems. Of course, the government didn't like it. President Biden got all mad about it. But look, it

is what it is, they said. I said, it's a rising concern for investors, contributing to a sell off that took US government bond prices to the lowest level in sixteen years. According to the chief economist from the US at Natoxis, deficits will remain large as an interest costs take up a larger share of the budget. The debt burden will continue to grow. And it's not just continue to grow. It turns into a debt spiral. It turns into a coil that winds up and gets power and

then blasts off. So we're going to talk about that, but let's just talk about what happened first of all. All right, So I don't want to go exactly all the way through exactly how this works, but let's just take a look at exactly what happened last week. So what we saw is that again the Treasury, we went to market to try to raise this money. Now there's a couple of things that are important that I want to start with first. So first of all, it's not just you and I seeing this. It's not just a

moody seeing this. The Treasury itself already knows this. And how do I know that they know this. It's because they've said so. And what they're doing is they're trying to game the system. So what they do is they announce how much they're going to be borrowing. So what we saw is that the Treasury announced they would be borrowing seven hundred and seventy six billion for the fourth

quarter of twenty twenty three. And the reason why it's important is because they announced that they're going to be borrowing less than they had borrowed the prior quarter. Seventy six billion dollars less. So what they're trying to say is, look, look, our deficit spending is going down. We're borrowing less money than we borrowed last time. Instead of eight hundred and

fifty billion, now it's only seven hundred and seventy six billion. Okay, big deal, But they're trying to show that it's going down. But here's the thing. They're lying. And what do I mean by they're lying. What we can see is that they announce this number, but they go back and revise it later. Oh, turns out we needed to borrow more. We're going to borrow more than we had projected, and every quarter it's the same thing. It's not just that we see it.

The Treasury actually told us this. Let's break this down. So what we can see is that they came out with an announcement and they said that, you know, we're going to be borrowing less money than projected. But there's more in this that I want to unpack. And what is that. Well, there's three things, three points that were in the statement from Janet l in the Treasury that

I think we need to break down. First off, the first thing they said is quote primary dealers explicitly noted a high degree of uncertainty overall around the deficit and growth forecasts, reinforcing the Treasury's need to maintain flexibility in their issuance strategy. That's what this is what Jane Allen Treasury said. So what does that mean, Well, the primary dealers who's that? That's the banks. This is like the

Golden Sacks. These are the buyers of last resort. These are the buyers that the government mandates to buy the debt for them. So they're saying that these buyers of last resort at the banks are seeing this high degree of uncertainty around the deficit and the growth forecast. Exactly what Moody said. So yelling herself is saying, we see they're saying this, and so what it means is that they're admitting that the primary dealers are uncomfortable with this.

They're admitting that they're concerned about the demand for these treasuries. They're concerned with being stuck with this. They don't want to do that. Remember this point. We're going to come back to it at the end when we break down some of the math. Point Number two is that the Treasury anticipates that one additional quarter of increases to cupon auction sizes will likely be needed beyond the increases announced today. So what does that mean? That's what I was just saying.

Every single time they announce how much they need to borrow, they go back and revise that. So what they're saying is that the Treasury is expecting to add to the amount they need to borrow this quarter beyond these estimates. So they're telling you right there that they're basically lying to you. They're saying, Hey, we're probably going to have to to this, so we're going to show you the short number we're probably going to add to it. I

don't know who they're really fooling by this. I mean, you know, I'm just some guy on the internet here and I see that every month or every quarter they go back and revise this. They're telling us that they're going to do it right here, Who are they really fooling here? Number three, they said that the Treasury continues to make significant progress on its plans to implement a regular buyback program in twenty twenty four. That's the big one.

What are they saying. They're saying that the Treasury is ready to implement a program to buy back their own debt, basically buy their own debt, sort of like what Japan does, sort of like a snake eating its own tail. What they're saying is, we're not done here. We have many more magic tricks up our sleeve. This is something I talk about a lot. You know, there's lots of brilliant market analysts out there, way more brilliant than me. One of my favorites has been Harry Dent Junior. I've read

like five of his books. His research is so good I believe actual his research is correct. His assumptions have been wrong. His research is right, his assumptions are wrong. He's continually called for a crash, a crash, a crash, a crash, crash that never comes. And the reason why it never comes is because he just continues to fail to realize how many more tricks the FED has up their sleeve. If things worked normally, he would be right. But they don't. And what they're telling us right here

is they have more magic tricks up their sleeve. This is why Harry Dan's wrong, This is why Peter Shift's wrong. This is why all of these people calling the Michael Burry's are wrong. They're all confists to happen, but they fail to realize how many more tricks they have up their sleeve. If you just tune in, you're listening to the Markmas Show. I have a whole lot more to cover when I come back about what is going on

with the treasuries and where we're going. You don't want to miss it, don't go away, I'll we're back, all right, welcome back. If you just tune in, you're listening to the Mark mass Show. We're talking about what happened last week where we almost had a failed auction. So let's break down how that happened. So there was a thirty year auction, so you have everything from t bills up the bonds, and that's the duration anywhere from months to

years or decades in this matter. And they sell these entranches. So in the thirty year auction, they wanted to sell twenty four billion dollars of that. And what happens is there's something called a bid to cover ratio. It's a BTC and that means how many bids, how much demand is there for the supply that they're offering, and what this is usually represented in a number and we saw that this one came in at two point two four percent,

which doesn't really maybe mean anything to you. So we have to sort of look at history and we can see this is typically around two point five or two point six, So to go from two point six to two point two, that's very low. And what we can see is that it looks like foreign demand was off, but really I don't think it's exactly that. So what do I mean by this? What we can see from the Treasury report is there's basically three tranches of buyers that they tell us. One they tell us about the

primary dealer. The primary dealers again are these buyers of last resort. These are these banks. The second one is what we call direct bidders. These are institutions and these are individuals. And then third we have indirect bidders. Indirect

bidters are the foreign demand. These are foreign buyers. And what we can see for this thirty year auction, if we look back through a few auctions of this year January, October, and now November, we can see that in January, the primary dealers, which are the buyers of last resort, the ones mandated to buy, took up nine percent of the bonds in November. They well, actually before we talk about let's let's talk. Let's let's talk. Okay, Well, let's talk

with that. So they bought nine percent in January. In November they were forced to pick up almost twenty five percent, so they have to suck up the difference. They had to buy nine in January twenty five percent. So what happened, Well, the indirect bidders, which are the foreign buyers, in January picked up seventy five percent. In November, they only picked up sixty percent. The direct bidders picked up sixteen percent in January and picked up fifteen percent November, So the

direct bidders were about the same percentage. It was the indirect bidders that fell off from seventy five percent to sixty percent, and so the primary dealers had to pick up the difference from nine to twenty five percent. But that's not the whole story. What I really want to show you is that it's the amount of auction that the amount being auctioned off, it's the supply. So what we can see is that the foreign buyers, the indirect bidders,

actually bought more bonds in November than in January. So in January they bought thirteen point four billion. In November they bought fourteen point three billions. They actually bought an extra billion dollars worth of bonds. The problem isn't as much the demand side. There's still demand. They actually bought a billion dollars more than they bought before. The problem is there's too much supply. The problem is the treasury is spending way too much money and borrowing too much.

This is very important. As we get to this later part, you're going to understand why. But the problem is the government cannot and just will not stop spending. We're now fighting multiple wars. Janet Yellen's out there saying we can fight multiple wars. Sure, we're fighting a war on in Ukraine. We're fighting a war on Israel. We're fighting a war on terrorism, We're fighting a war on obesity, we're fighting a war on poverty, we're fighting war, We're fighting every

single war you can imagine. And we're spending more and more money. And the problem is is there's not enough people willing to buy that debt. Now, like I said, it's not a demand problem. The demand actually went up. They actually bought more, But what happened because there was more supply than there was demand. Then the price that they had to offer the Treasury I had to offer the buyers went up. Now, this is what happened. This is what showed. This is how it shows how bad

this was. And so in this bid tocover ratio, since there was enough buyers, the price had to go up. So basically, the Treasury was hoping to sell this debt for less than what they had to do it what they had to sell it at, and the tail went up by five basis points, five basis points. This is what we call a gigantic tail, five basis points. We haven't seen that since, like I said, two thousand and eleven. So let's put this into context here a little bit.

If we had a lower bid to cover ratio and it went up let's say six percent, we're at five. If it went up to six percent, that'd pretty much be a complete disaster. And what that would show the world is that there's so much dysfunction the treasury market that they can't trust it anymore. All right, That's what it would show. Now because of that, because the yield went up, then the bonds went up as well, and they moved so much where it went down, they moved

in opposite. We're seeing these move and five basis point move is sort of like risk asset that might be something like we might see in the cryptocurrency markets, not the US treasury bond market. The US treasure bond is the global reserve asset. It's supposed to be what we would consider a risk free asset. It's supposed to be the most secure asset in the world. It's not supposed to trade like a like a cryptocurrency, it's not supposed to trade a like a meme stock. But yet here

it is. And this is the problem. We haven't seen this much dysfunction in the treasury market since the two thousand and eight financial crisis. Now we can see this in an index called the move INDEXMOVE and it measures this high volatility and it shows us how bad the market conditions really are. And like I said, we haven't seen this much dysfunction. We haven't seen this much problems in this treasury market, in the largest, deepest, most risk

free market in the world, since twenty ten. And so it's no doubt that we're seeing investors booped from both the amount of debt that the Treasury is trying to issue as well as how bad that auction went. But here's where things really get interesting. What we're witnessing is we're witnessing a showdown, a showdown of the Federal Reserve and the Treasury, the US government. I've been talking about

this for a while. As a matter of fact, I made a video, I want to say it was late last year on my main YouTube, pianel Mark Moss talking about this exact thing, how the Fed and Treasury were at war. They were battling each other. You see, the Treasury wants to continue to spend money. They want to continue to pay for UBI, and pay for more for welfare, and pay you not to work, and they want to pay for wars, and they want to pay for all these things, but they don't have the money to do it.

The Federal Reserve. They want the Federal Reserve to give them the money, but the Fed doesn't want to. Why because the Fed wants to control the dollar. They want the dollar to remain strong. They're also trying to fight inflation. If the Fed continues to give the Treasury more money to spend than inflation continues to go up. So the Treasury wants to spend money causing inflation. The Fed's trying

to bring inflation down. That's the battle. And so what the FED is trying to do is trying to make you and I broke, so you and I spend less money to help bring inflation down. What the problem is, You and I aren't the ones causing the massive amounts of inflation. It's the Treasury doing this. But as the Treasury is trying to sell these and there's not enough people buying them, where are they getting the money to do that? Because right now the FED is in what

we call QT, or quantitative tightening. So the FED doesn't want to buy these bonds right now. As a matter of fact, the FED wants to sell the bonds. And at the same time they want to sell the bonds, they're trying to raise the rates. But how can the Fed be selling bonds into the market when the Treasury is trying to sell bonds in the market and there's not enough buyers for them. Well, one of the ways they've been doing is the Treasury has been tapping into

the reverse repo facility. Now reverse repo facility was over two trillion dollars and they've been taking the money from the reverse repor facility, and it's been drained going into the short end what we call t bills of this of this debt, and this has been tapped, and it's been draining at a pretty rapid rate, and we're down to about one point four trillion in that right now. The problem is, at the rate we're going, this is going to run out very soon, and we know the

exact date at the current run rate. I'm going to talk about that in a second when I come back. If you're just tuning in, you listening to the Mark Mass Show, talking through what happened with the Treasury almost failed auction last week and what this means. I'll be back with more a minute. Don't go away, We're back, all right, Welcome back. If you're just tune in your listening to the Mark Mash Show. We're talking about what happened last week with the Treasury auction, how it almost failed,

and what this means and what to expect moving forward. Now. I was saying that the Treasury has been pulling money. Money has been coming out. I want to say they're pulling out, but money's been coming out of this reverse repo facility. And going into these short dated tea bills. The problem is, at the rate we're draining this facility down, it's looking to run out pretty quickly. As a matter of fact, at the current run rate we're at, this could be empty in the next ninety days. It's a

pretty big deal. If that is empty and the Fed doesn't want to buy the debt, what's going to happen? Well, remember we talked about the statement that the Treasury put out, and in that statement they talked about a bond buy back program and talked about how they wanted to get it up and running. Well, my guess is that's the magic trick they have up their sleeve. If they run out of money in the reverse repol facility and the Fed won't buy it, what will they do, Well, they'll

just buy it themselves. They'll just buy it themselves. They'll be able to buy whichever bonds they want to make sure there's enough liquidity in the treasury market. Who cares if nobody wants them, We'll just buy on ourselves, right, Why not? But how could you say? How could the Fed achieve what they're trying to achieve, which is selling off their bonds at a time when again there's no demand,

and I don't see how their's a way. I don't see how the FED could possibly continue to raise rates in this environment and continue to sell off bonds at the same time. Now, this is what I've been saying. I made a video about it on my main YouTube, pianel Mark Moss, And today I saw a headline come out from what we call the Fed's mouthpiece, Nick Timrose. Nick Timrose is somebody that seems like the FED sort of leaks information to and then Timros leaks it out

to the press. Why does this even happen, Well, because the FED doesn't want to surprise anybody. You know, I tell you what's going on, and I sort of read between the lines for a year. But it's not like this big secret. Guess the FED tells us this information. They have this information leaked out because they do not want to surprise the markets. They're trying to tell you months in advance of what's going to happen. So, for example, in November of twenty twenty one, they told us they

were going to start raising rates. As soon as that happened, Bitcoin started selling off first, because it's the most sensitive to risk assets. Then the Nasdaq, which of the tech stocks, started selling off. But they didn't actually start raising rates until like February of the following year, so it was a couple of months. They told us they were going to do it, but they didn't actually do it for

a couple of months. See, they want to give you plenty of time to start planning, so they're not trying to surprise the market, which is why they use people like Nick Timrose in the press to leak this information. And so today he said that the October payroll report and inflation report strongly suggests that the Fed's last rate

rise was back in July. The big debate at the next FED meeting is shaping up to be over whether and how to modify the postmeding statement to reflect the obvious the central Bank is on hold, so the Fed whisper, he's telling us that the Fed is done hiking rates because how can they? How can they continue to raise rates when the government is raising this debt like crazy? How can they? And the answer is they can't. And the answer is it looks like they're going to formally

announce that they're on hold. The next part is how can they continue to let bonds roll off of their book. How can they continue to sell bonds in the market when there's not enough people buying the bonds that there is. The answer is, I don't really see a way to do that. It looks like the Treasury again in this battle over Fed versus Treasury, it looks like the Treasury

has the Fed boxed in right now. They got them kind of painted into a corner, if you will, because if the Fed, the Fed's sort of damned if you do, damn if you don't. If the Fed signals that pause were a pivot, what happens, Well, the equity markets, the risk on assets, the assets are going to go to the moon, and they're trying to avoid that. They're trying to they're trying to bring those down right now. But if they announce this pause or a pivot, they're going

to run back up. If the Fed signals or moves right higher, then this is going to hurt the US treasuries, which is going to make it harder for the Treasury to borrow money. But it's already too hard for the Treasure to borrow money. If that happens, then the treasure would collapse under its own weight. For demand. So what do they do? Well, that's a big problem. This is

the painted into a corner, if you will. We're stuck in this doom loop where if the treasury rates go up, So if the FED raises rates, then the interest that the Treasury has to pay goes up. If they have to pay more interest, then that creates a larger deficit. If there's a larger deficit, they have to take on more debt. If they take on more debt, then they have more long term yields going up, which means even larger deficits. And if there's even larger deficits, then they

need more debt. And this is a vicious cycle, a flywheel. We call it the debt death spiral. And so there's just no way the FED can absolutely win here. They could continue to do that and they could just completely destroy the government in the US Treasury, but then there's no Fed, and so what can they do? What is the likely scenario here? I don't know what's going to

happen because my crystal ball doesn't work so well. But I can tell you what I think is likely to happen here based off of history of how the FED works, It seems like the FED is usually too slow to respond, just like they lowered rates too low and kept them at zero through the pandemic and through twenty twenty, and then when we saw that inflation was starting to rage on, they said, oh, no, inflation is not a problem. Oh,

inflation is transitory. Oh it's going to go away. And they kept rates way too low for way too long. And now we're dealing with this problem, and so they'll probably keep rates way too high for way too long. At this point. They're going to try to manage that, but I would expect that these rates will stay way too high for too long. In this yield curve, you've been hearing about the yield curve in version showing that

there's a recession coming. And as I've talked about, it's not the yield curb inverting, it's the problems when it uninverts, and I expect it to uninvert within the next couple of months. When that happens, then we'll see the price of bonds continue to probably take a massive hit. We're going to see a massive flight to hard assets and moneies like bitcoin and gold and other anti inflationary assets.

And I think we're already starting to see this. So, for example, I've been talking about I think last week we talked about how it's almost sort of a scam. We have all the governments, the institutions, the sovereigns are having this massive rush to hard assets while you and I are being tricked into holding FIAT. You and I are being told, oh, there's this big crash coming and you want to be in cash right now, we're being tricked into buying US dollar nominated assets when everyone else

is buying hard assets right now. What do I mean they're buying hard assets? Well, we talked about this. We can see the central banks around the world are net sellers of US treasuries. They don't want to hold their surplus. Right So, if you're a nation, you export goods and you receive back dollars, the difference is your surplus your profit. Where do you park that? Where do you park those

hundreds billions dollars? Well, that typically has been held in US treasuries, but that's paper, that's FIAT, and they don't want to hold those paper FIAT when they know the government is continued to print so much more So that's why the central banks around the world have been net sellers of US treasuries and what are they buying. They're buying hard assets. They've been net buyers of gold, but

they're not just buying gold. As a matter of fact, that Chinese have bought half of all the lithium mines in the world, So they want to buy hard assets in the ground. We have nations that have assets in the ground, like Saudi Arabia and even Russia saying we're not going to put out as much oil anymore. We would rather hold the oil in the ground than hold our surplus in US treasuries. So we're already seeing this

mad rush USh to these hard assets. Meanwhile, we're watching you know, energy assets, hard assets and other assets going through the roof, and we're being misled. Now, what I want to do is I want to break down the three types of assets that we have. I want to break them down three different categories so you can you can think through how to do this. I want to walk you through a mental mindset on how you can think through this, how you can prepare your portfolio for

what I think is coming ahead. Again, like I said, my crystal ball is a little foggy, so I don't know exactly, but I'm want to walk you through what I think is the most possible, the most probable, and what I'm doing to position myself for it. How I think through that, and how you can do the same, and more importantly, what you should be watching so you

can see how all this unfolds. If you're just tuning in, you listening to the Mark mas Show, we're talking about how this failed treasury auction is sort of coming to a head and where this goes the next ninety days. Be aware of this. It's a big deal. I'll be back with more in a minute. Don't go away, I'll

be back, all right, Welcome back. If you just tune in, you're listening to the Mark Moss Show, we're talking about what the heck happened last week with this almost failed US Treasury auction and what this means now I walk through all the mechanics of this. I talked about this eventual showdown that's coming, and I just don't see any way the Fed is able to continue to raise rates in this environment and continue to sell off bonds. There's just no way unless magically, Well there is a way.

There's always a way, So what would it take magically the US government, the treasury would have to spend equal or less than the amount of money they're bringing in. Somehow, they'd have to shave about two trillion dollars per year off their spending. What would you say The odds of that are happening about zero, So that's not going to happen.

So what happens Well, as we've already talked about, the FED mouthpiece Nick Timrose, what we call the Fed Whisper, has come out and said that it looks like the FED is done hiking rates. At the same time we saw this week the new CPI numbers came out, the consumer price inflation data came out, and it looks like

the FED has won the war on inflation. Pretty interesting timing for these reports to come out, because the FED has to stop tightening, they have to stop raising rates, they have to stop still enough bonds, but they can't do that if inflation is still raging. So it's pretty interesting the new CPI reports come out showing that they've basically won the war on inflation at the same time that Timrose, the FED Whisper, is coming out and saying

that they're done again. Like I said, the problem is that if the FED comes out and announces a pause or a pivot, then we're going to see risk assets take off. So don't look for them to come out and officially announce it. Instead, it's going to be through some stealth ways. So like, for example, the Treasury is creating this new funding facility where they're going to buy their own bonds, this bond buy back program, and they'll buy that. Maybe the FED will give them some money

off the books. Right, they're going to say this is not QE, but it is QI. So technically QE works a certain way, it's a certain function, but non technically or I guess technically, even though QE has to work a certain way, Ultimately, what it does is it adds more liquidity to the system. What it also does is it shows that the Fed's willingness, the Fed's willingness to

bail out or fund the liquidity in the system. And so whether they don't do it through the exact mechanism that's technically called quantitative easing, if they do it a certain way, it still achieves the same results. Now, a lot of this is what they do through what we call job owning, where the Fed's trying to move the markets based off of just what they're saying. So they're trying to tell you that they'll do something even though they haven't, and so we can see that what they

do has an effect on the markets. Whether it's technically quantity of easy or not doesn't really matter. It achieved the same result. So that's what we'll see. So for example, in March of twenty twenty three, because they had jacked up the rates so high, we saw banks starting to fail. You remember that, we saw Silicon Valley Bank, We saw whatever the banks were, the Felt three banks, some Restronto Banks, Silvergate Bank, Silicon Valley Bank, and I think First Republic

Bank all failed. And what they do well, they created a new funny facility called the BTFP and it wasn't QE, but it sort of injected a few hundred billion dollars liquid into the system to keep the whole thing from crashing down. Now, I did a whole video on my main YouTube channel breaking this down the difference of how the FED functions in the market today and how it's changed since two thousand and eight. So I don't have it in front of me, but just some basic math

was in two thousand and eight. We saw the housing market actually start melting down in two thousand and six. So in two thousand and six we saw building permits, which is a leading indicator. If you're not pulling building permits, then you're not going to be building in the future, obviously, and we saw those drop by twenty six percent in two thousand and six. But yet they didn't do anything. It took about like a year and a half before

they started to like lower rates. The trigger for the great financial crash in two thousand and eight was really bear Stearns going bankrupt, and it took them, I want to say, was it about eight or nine months before they did anything, and they organized a baillout of like one hundred million dollars, so it took eight or nine months. Now fast forward and look at this in twenty twenty three, when the banks failed, within six days they moved up. They moved and had this money set up, this funding

and fifth fully set up. So they went from taking you know, seven eight months to now taking six days. So it shows the willingness of them to act. In twenty twenty we saw them instantly moving to the markets and set up multiple funding facilities. In fact, I think there was thirteen funding facilities. They were actively buying even stocks into the market. They were buying bonds, they're buying

mortgage backed securities, they're buying all these things. Then they even went a step further and they started setting up dollar swap lines. So now all the other banks around the world will give you money as well. Think of this as like credit cards. Think about if the banks just sent you out, like, hey, here's five new credit cards. If anything were to happen to you where you know, you can't make your car payment, your house payment, whatever, just put it on the credit card, no big deal.

If they would just send us all out, you know, one hundred thousand dollars in credit cards that we could just use if we needed, that would probably insulate us so we wouldn't have this recession. And that's exactly what they've done. They went around and gaven all these swap lines out to all these banks. Now it's not just the friendly nations. I think there's about thirteen nations or I should say central banks that we have these open

with at the same time. And so we've seen this fundamental transformation of how these central banks work in the markets, and not just how they work, but even the speed and timing of how they work. And so they've gone from this sort of reactive lagging approach to now a pre emptive moving in advance to prevent these things from happening. And so my base case is that we have massive

amounts of inflation in front of us. My base case is that we do not have a deflationary crash where everything falls in half and home prices are worth fifty percent and stocks worth fifty percent. I believe we have an inflationary crash. Now. Either way, a crash is bad. Right. A crash is bad because prices will move up more than an income and we won't have enough money to pay for the things that we want to maintain our

quality of life. So if you lose your job, your quality of life goes down because you can't buy the same things, or you get a lower paying job, you can't buy the same things. But if prices go up, you're also in the same boat. You could still have your same job, but prices have gone up so much you can't afford those things. See, either way, a deflationary or inflationary crash is bad. I'm expecting an inflationary crash. Now, could there be a deflationary crash? First? There certainly could be,

And this is what most people think. So even the Harry Dents and the leaderships of the world think that we'll have this big crash he's calling Harry dentis calling for an eighty percent market crash, and then he thinks that the FED will come in and blow this sky high. I don't think that's That's not my base case. It's certainly possible. I'm not putting that out of the realm with possibility. It's certainly possible. I don't think that's the

most probable scenario of my case. I think we sort of just continue to trudge along, continue to move sideways, chop back and forth. We see a lot of volatility. Potentially we see some big swings, some ten to fifteen percent swings. I don't think we see the sixty eighty percent like Harry Dent says, and I believe that will cause the FED to blow this sky high. Now, going back to charting this since two thousand and eight, we saw that the FED intervening in the market to tune

of about one point two trillion dollars. It's about seven eight hundred billion roughly the first bellout package total amount of one point two billion in two thousand and eight, and it took the markets. The market's dropped sm P five hundred dropped about sixty percent and took about seven

years to recover its high. In twenty twenty, because the FED moved so fast, the market didn't drop sixty percent and only dropped thirty percent, dropped half as much and instead of taking seven six seven years to recover, it took six or seven months to recover. You seeing how they changed the way they interacted to the market, and the market didn't fall as far and it recovered much faster. It was to the tune of about ten trillion. Instead

of one trillion, it was ten trillion. I believe that the FED will have to intervene, probably to the tune of fifteen to twenty trillion, and so instead of a thirty percent drop, maye we'll see a fifteen percent drop. But it's what happens after that, you see. After two thousand and eight, stocks gold went on to make crazy knew all time highs. After twenty twenty, stocks went on to make even crazier a new toime all time Hyes, risk assets like bitcoin et cetera. And I leave in

twenty twenty four. If this happens, it'll be the same thing. I don't know what happens in the next to nine months or twelve months. I firmly believe that in the next three to five years, home prices are up fifty percent, gasoline prices, food prices, all those prices are fifty percent. Bick Wind's up to three hundred percent. That's what I think happens now between now and then. I don't know.

It's anybody's guess. Potentially, there's so many black swans out there that this could catch the FED off guard, but it looks to me like they're preempting it, and we're seeing it from the Treasury announcement right here. Anyway, you listen to the Mark Mas Show breaking down this FED Treasury auction, what happened, and what I think happens in the future. That's what I got for you today. Hopefully have enjoyed this. Leave me a review on the podcast

if you're listening, And that's what I got. Until next time,