Loading ...CENTRAL BANK WAR !!
Tom Luongo is THE go to guy if you want a relieable and viable Thesis as to what is Going on behind the scenes . RIVETLING TO SAY THE LEAST.
HE POSTS MUCH OF HIS STUFF ON HIS PAY PER VIEW PATREON CHANNEL . WELL WORTH THE SUBSRIPTION .
Below I will post a link to todays report ..It says “Unlocked” so it may be public..let me know…If Not I’ll copy it
…………
I am going to try to nutshell what I just read . OK..This stuff is above my pay grade but here goes
1..Tom’s central Thesis is the the FED has been “hijacked” for years under Yellen Bernanke et al by the ECB and in particular the DAVOS Schwabenkalus crowd .
2…The Fed has been facilitating ALL of their schemes by being the Central bank to the World…Not only to the USA as it was intended.
3…The LIBOR system is Euro Centric and it has been the Controlling System for all Monetary Policy.
4….There is a new system which has been created and is being used and soon to go mainstream and completely supercede LIBOR …called SOFR which is US ( FED) Centric.
5…BASICALLY THE FED WANTS TO BE FREE OF THE ECB / DAVOS AXIS OF EVIL AND TO BE ABLE TO BECOME USA CENTRIC …TO PROTECT THE DOLLAR AND OF COURSE TO PROTECT THEIR OWN INTERESTS…THE US CENTRIC ( NEW YORK BASED) MEGA BANKS LIKE JP MORGAN AND OTHERS CONTROL THE FED. JAMIE DIMON THE HEAD OF JPM IS THE CENTER OF THIS INITIATIVE ALONG WITH JAY POWELL….TO CUT OFF THE LIFE BLOOD (FUNDING) TO THE ECB / DAVOS AXIS OF EVIL
6…THEY ARE DOING THIS BY DRYING UP THE AVAILABLE EURODOLLARS ( A CONCEPT I DO NOT UNDERSTAND ) SUFFICE TO SAY THAT AS US INTEREST RATES RISE EURODOLLARS ( US DOLLARS OVERSEAS) DRY UP AS LIQUIDITY IN THE EURODOLLAR MARKETS DRAIN BACK TO THE US.
7…LUONGO HAS BEEN RIGHT SO FAR THAT THE FED IS DETERMINED TO CONTINUE TO RAISE RATES…NOT PRIMARILY TO FIGHT INFLATION BUT TO EXTRACATE THEMSELVES FROM THE ECB/ DAVOS CONTROL.
8…THE ECB/DAVOS IS ALL ON BOARD WITH CBDCs ad of course..THESE IF IMPLIMENTED WOULD REDUCE THE NEED FOR COMMERCIAL BANKS ALTOGETHER EVENTUALLY AS DEPOSITS WOULD BE DIRECTLY WITH ONE WORLD CENTRAL BANK…LIKE WTF IS IN THIS FOR THE BANKS ?
9…THE ECB / DAVOS / DEMOCRAT PARTY ARE AND SOME US BANKS ARE ALL ON THE SAME TEAM AND THEY DEVISED WAYS TO KEEP THE LIQUIDITY AND MONEY FLOWING TO THEIR PROJECTS THROUGH SEVERAL PONZI SCHEMES AND SCAMS INVOLVING SOME OF THE FAR OUT THERE CRYPTO SCHEMES LIKE STABLE COINS AND THE LIKE
10…THEIR PET MONEY CREATING SCHEME WAS FTX…THE FED / JPM AXIS EXPOSED THIS SCAM AND FACILITATED BLOWING IT UP AND TURNED OFF THAT SPIGOT
11…NOW THIS SILICON VALLEY BANK WAS JUST ANOTHER PONZI SCAM CREATED FOR THE SAME PURPOSE. SO JAMIE DIMON A COUPLE OF DAYS AGO STRONGLY RECOMMENDED PEOPLE TAKE THEIR MONEY OUT OF SILICON VALLEY AND PLACE IT WITH JPM. THEN KABOOM…RUN ON THE BANK…IMPLOSION…BOOM ANOTHER BLACK HAT FINANCIAL SCHEME BLOWN UP…ANOTHER CRYPTO BANK …SILVERGATE…ALSO BLEW UP…GONE
12…LUONGO POINTS OUT THAT JUST A FEW DAYS AGO THERE WERE RUMOURS GALORE THAT ONE JAMIE DIMON WAS AN EPSTEIN PAL !
HA….WHAT MORE PROOF OF CENTRAL BANK WARS DO WE NEED TO SEE ?
13..LUONGO BELIEVES THAT BITCOIN IS A LEGITIMATE CRYPTO AND THE IT IS SUPPORTED BY THE FED…WHEN FTX WENT DOWN MANY SHIT COINS IMPLODED AS WELL …THESE SHITCOINS ARE ALSO A WAY FOR THE BAD GUYS TO CONTINUE TO GREASE THEIR SKIDS APPARENTLY…AS TOM SAYS ONE OF THE MANY WAYS THESE GUYS ARE TRYING TO KEEP FUNDED IN SPITE OF THE FED RAISING AND CUTTING OFF THEIR FINANCING. TOM POINTS OUT THAT AFTER FTX EVERYBODY THOUGHT BITCOIN WAS DOOMED …BUT IT RECOVERED.
14…BITCOIN TOOK ANOTHER HIT WITH THE IMPLOSION OF SILICON VALLEY …BUT HE SAY IT WILL AGAIN STABILIZE WHEN IT BECOMES CLEAR THE ONLY REAL CASUALTIES WILL BE THE SHIT CRYPTOS .
15…THE BLACK HATS WILL TRY TO CREATE FEAR FOR THE NEXT FEW DAYS TO CAUSE SYSTEMIC FAILURE …..BUT THE SYSTEM WILL NOT FAIL…THE FED ET AL ARE ACTING LIKE THEY ARE CONFIDENT THE CAN PULL THIS OFF…IE…DETACH THEMSELVES FROM THE VERMIN AND DESTROY THEM IN DOING SO…BRINGING MONETARY POLICY BACK TO BEING US CENTRIC AND RESUME BUILDING A STRONGER US ECONOMY .
anyhow This is what I understand of the Thesis…
Many of Tom’s detractors are LOATH to agree that the FED and JPM and indeed Wall Street ( which is controlled by JPM and all) are Now the White hats..battling against The ECB / Davos / Brandon / Soros Axis of Evil…but to those he says…Get Over Your Bias and pass the popcorn..THIS IS THE HIGHEST STAKES POKER GAME IN THE HISTORY OF THE PLANET !
…………………
So, Silicon Valley Bank. I’m sure you are all wondering what I think. If you remember back to November I quickly came to the conclusion that FTX was a perfectly-timed hit job on the DNC, Davos, and their whole rotten money laundering operation.
You had to think that FTX wasn’t the only cog in that machine.
Also, during that time, Dexter and I both noticed that all through the bear market collapse of Bitcoin it was one stablecoin failure after another which caused each major downdraft, crashing bitcoin through major support level after major support level.
Finally, after FTX, with all of the leverage gone, Bitcoin found a floor at $16k, the FUD was running high that it was going to $5k. USD Tether was about to implode, GBTC has been beaten with the NAV ugly stick (Still trading at 40% below NAV), etc.
But, as always, when the headlines are that bearish and everyone is jumping out of windows, that’s likely your bottom.
And it was.
In the initial flush of what happened I came quickly to the conclusion that FTX was a Fed/NY Boys hit job and turned out to be right on the money with it. Dexter was correct in his assessment of what FTX was, “a Ponzi Hoover,” designed to hoover up the cash and assets of the ‘crypto’ space and use that to build a competitor to the US dollar payment systems controlled by the Fed and the NY banks.
FTX was close to achieving escape velocity with its system and therefore had to be taken down. Now, Silvergate was another company on the same path as FTX, having its SEN payment system capable of settling transactions 24/7/365 in real time go live with its stablecoin as the liquidity token.
Between FTX and Silvergate the Fed’s own project, FedNow, would have real competition and more synthetic dollars would flood the world.
To get an idea of what’s going on here, this video does a good job introducing the elements. I don’t think he, like Zerohedge, gets to the right answer, but he is circling it.
That said, Zerohedge’s commentary here is great if you want to get an inkling of what happened and how. What they miss, as always, is the most important question, “Why?”
For once they even mostly get the “Who?” right. They try to pin this on JP Morgan Chase CEO Jamie Dimon, digging up that Dimon encouraged people to pull their money from SVB.
Of course, Jamie, who has suddenly emerged as a key figure in the Jeff Epstein scandal alongside Jes Staley, knows this, and would be delighted with an outcome that kills two birds with one stone: take his name off the front pages and also make JPMorgan even bigger. Actually three birds: remember it was JPM that started that “Not QE” Fed liquidity injection in Sept 2019 when the bank “suddenly” found itself reserve constrained. We doubt that JPM would mind greatly if Powell ended his rate hikes and eased/launched QE as a result of a bank crisis, a bank crisis that Jamie helped precipitate.
And while we wait to see if Dimon’s participation in the Epstein scandal will now fade from media coverage, and whether Powell will launch QE, we know one thing for sure: JPM was a clear and immediate benefactor of SIVB’s collapse because in a day when everything crashed, JPM stock was one of the handful that were up.
Let’s review a few things that I mention all the time.
FOMC Chair Jerome Powell has no problem with Bitcoin
Powell, however, hates stablecoins
Stablecoins are nothing but Eurodollars that exist in ‘cyberspace’
They are synthetic US dollars and, as such, are really artificial claims to dollars
Again, not dollars, just claims to dollars no different than Eurodollars
What many of the Tylers at Zerohedge refuse to accept is that the Fed is at war with Eurodollars. Maybe they are finally somewhat convinced that I’m right about this but are still in denial about how the Fed extricates itself from the Offshore Dollar Markets without breaking the whole system.
It’s a fair position to take, frankly. I don’t claim to know if they can or cannot pull this off. But, what I can say is that they sure are acting like they can.
Now, back to SVB and Silvergate. SVB’s balance sheet was stuffed to the gills with low-yielding long-dated USTs, the assets of choice for a stablecoin like USDC. They also held a whole lotta Mortgage-Backed Securities (MBSs) to get yield.
With a stablecoin, you don’t actually care much about yield, only that you can get access to ‘real dollars’ at nearly no cost. In fact, the lower the cost the easier it is to ‘print reserves’ if need be through leverage and carry trades.
This is a perfect example of what I have been saying for nearly two years, that the Fed is at war with Eurodollars, both ‘real world’ and ‘crypto.’
This bank run was absolutely another hit job on ‘crypto’ but not Bitcoin. Dimon is crowing this morning. It’s having real repercussions around the banking community. There are going to be a few more bank runs here as well as a lot of negative headlines as payrolls are missed, layoffs occur, etc.
That’s the bad news. Every ‘Pivot’ monkey on Twitter will be screaming that the Fed has to now. They are going back to the zero-bound. This is it! The world is breaking. The dollar is toast.
And hey do this to feather their own nests, confirm their biases, and feed their pathetic egos.
Silvergate and Silicon Valley Bank were two peas in a Eurodollar pod. One was the architecture and the other the money funnel for a competing system to end-run the Fed’s tight monetary policy. These schemes were all birthed during the Yellen/Bernanke era of ZIRP and NIRP.
They were meant to be the bridge projects to build a global CBDC network which the market would beg for, because of the lure of ‘yield farming’ in a world where the central banks were ‘trapped at the zero bound.’
My latest public blog post goes over this idea of carrots and sticks to move from one system to the next, from the petrodollar to the asset-backed BRIICSS settlement system on the horizon or from LIBOR to SOFR.
These ‘crypto’ projects were sold to us as the new carrot to help Davos and the old money return us to serfdom through our own greed and desperation after fifteen years of negative nominal returns.
This whole ‘crypto’ stablecoin thing was nothing more than an attempt to truly co-op Bitcoin (and proof-of-work) which is truly tokenizing previous human work to issue a new bearer-asset form. It is, as Christine Lagarde called it, “an escape hatch,” which we will use if it’s available.
The Fed, in trying to protect itself here, is actually helping Bitcoin out here by removing these projects from the landscape and calling bullshit on all of them.
Since FTX blew up, as Chris Sullivan pointed out in Episode #131 of the GGnG Podcast, liquidity in Bitcoin went to ground (back on chain) and off the exchanges. This is the reaction of a healthy market not a dysfunctional one.
The dysfunction was in the exchanges, not the protocol nor the asset.
To close, the blow up of SVB is the next formal attack on this system. It will be mostly contained. The headlines will make you want to vomit and pull your money from the US banking system. This is Davos’ revenge through the media. They know that humans don’t trade these markets anymore, only headline-scanning computers.
But, like with Bitcoin going to ground after FTX, the algorithms will stabilize the minute there isn’t any systemic risk to the system.
One last point as I brought up in a Twitter thread yesterday before getting a lot of facts.
Let’s note a couple of things:
Powell sending the rate markets into panic on his Senate testimony
“We don’t care about your fiscal mismanagement in setting monetary policy, Senator Lummis.”
Big blow ups in a 50 bps FFR rate hike later this month.
Davos trying to “Nuts and Sluts” Jamie Dimon tying him to Jeffrey Epstein
A ridiculous legal ruling against Dimon/JPM in an Obama-controlled court
This screams the Soros hit-job on Italy’s Matteo Salvini over migrant boats.
Kuroda finally stepping down as head of the Bank of Japan
As I discussed in recent Market Reports, I believe the BoJ is about to shift policy away from Yield Curve Control.
Tucker Carlson’s expose of the fraud of 1/6 and the Committee’s Witch Hunt.
Continued attacks on Credit Suisse who the Fed bailed out last summer.
This feels like the opportune time for the Fed to simply say, “You know what, Klaus? That’s enough.”
We’ll really know if that’s the case if the Fed holds onto raising rates by at least 25 bps. If they go 50 bps, it’s popcorn time.
but, remember on HedgeEye ( a year ago) that Danielle diMartino Booth said Powell can do it— until….. until something breaks..
Good summary. I’ll come back to pieces later in the day.
Re eurodollars … not hard but its confusing because its a misnomer. Think xenodollars (as a noted former FT columnist — her name? polish sounding — referred to them). Dollars lent by an offshore bank (not under Fed regulation). (Originally, a French bank named Eurobanc that lendt $ to Russia, I believe. Or similar.)
” Dismissed by New York Times blogger, Paul Krugman, as a “terrible idea,” … I use the term “xenodollars” to be more etymologically correct.”
Anyhow … when European banks have issues (don’t they always?), the Fed would use CB swap lines to bail them out (take their euros for dollars). Is that now over?
LIBOR to SOFR … haven’t run across the details on WHY or HOW that makes a big difference. Need to find that.
Luongo’s thesis would have less cred w/o DDB. But she’s also from the hawkish Texas hard money wing, if there were such a thing inside the Fed. So she’s talking her book and Tom is following.
It would be helpful to see a litmus test in Europe, or a few European banks go under as evidence its working. Soros is no doubt navigating around the minefield. Unfortunately, measuring the market for xenodollars is impossible. How do you gauge if its shrinking? Eg, how do you keep the Chinese banks from lending in dollars?
It is high stakes poker (game of the century) and its worth paying close attention.
(as a noted former FT columnist — her name? polish sounding —
Izabella Kaminska is founder and editor of the Blind Spot. She spent 13 years at the Financial Times, most recently as the editor of FT Alphaville.
bugged me … only columnist I ever thought was worth reading at FT.