Gold Is Exploding To All Time Highs

Eurodollar University
5 Mar 202419:16

Summary

TLDRThe video script delves into the recent surge in gold prices, which is often misconstrued as an inflation hedge when it's actually a hedge against monetary errors and financial instability. It analyzes comments from Federal Reserve Governor Christopher Waller regarding the Fed's portfolio restructuring and quantitative tightening. The script challenges the popular notion of gold as an inflation hedge, instead positioning it as a safe-haven asset amid rising demand for safety and liquidity, potentially driven by recession risks, real estate concerns, and global economic uncertainties.

Takeaways

  • 🔑 The surge in gold prices is not due to inflation concerns but rather a rising demand for safety and liquidity, signaling potential risks.
  • 💰 Gold is not an effective inflation hedge; it historically performs well during periods of monetary and financial instability.
  • 🗣️ Federal Reserve Governor Christopher Waller's speech sparked speculation about a reverse operation twist or future quantitative easing (QE), but he was likely just discussing mechanics of an ideal portfolio.
  • 📊 Waller noted that household demand, not just hedge funds, is driving the deep appetite for U.S. Treasuries during quantitative tightening (QT).
  • ⚠️ The broad and deep demand for safe and liquid assets like Treasuries and gold could indicate rising recession risks, deflation concerns, or global real estate issues.
  • 📉 Treasury yields have been declining again, potentially signaling another leg lower and further demand for safety.
  • 🌍 Global factors, such as China's real estate problems, may be contributing to the increased craving for safe-haven assets.
  • 📈 Gold's recent rally aligns with the inverted yield curve and lower interest rates, reducing the opportunity cost of holding non-yielding bullion.
  • 🤔 The analysis suggests there could be underlying risks or instability that the market is pricing in through the demand for safe assets.
  • 🔮 Understanding the drivers behind the safety bid in Treasuries and gold could provide insights into potential economic or financial vulnerabilities.

Q & A

  • What was the main focus of Christopher Waller's speech that caused a stir in the markets?

    -Waller mentioned that he would like to see the Fed shift its treasury holdings towards a larger share of shorter-dated treasuries, which sparked speculation about a possible 'reverse operation twist' or future quantitative easing (QE) program by the Fed.

  • Why did Waller's remarks about a potential future QE program concern the markets?

    -The markets interpreted Waller's comments as a signal that the Fed might be preparing for another round of QE, which could be seen as an admission that previous QE efforts were ineffective or that the economic situation was deteriorating.

  • What was the main point Waller made about the demand for U.S. Treasury securities?

    -Waller emphasized that the demand for U.S. Treasury securities is broad and deep, driven not just by sophisticated investors like hedge funds, but also by households and the general public, suggesting a strong appetite for safe and liquid assets.

  • Why is the increasing demand for safety and liquidity, as evidenced by the demand for Treasuries and gold, significant?

    -The growing demand for safe and liquid assets like Treasuries and gold could signal concerns about recession risks, deflationary pressures, or other potential economic threats, which would explain the desire for safe-haven investments.

  • What is the misconception about gold being an inflation hedge?

    -The video argues that gold is not truly an inflation hedge, but rather a hedge against gross monetary errors and financial instability. It cites examples where gold underperformed during periods of rising consumer prices, suggesting it is more a safe-haven asset than an inflation hedge.

  • What factors could be driving the increasing demand for safety and liquidity, as evidenced by the rising prices of gold and falling Treasury yields?

    -Potential factors mentioned include recession risks, deflationary pressures, problems in the commercial real estate market, China's real estate issues, and other global economic uncertainties that could be fueling the desire for safe-haven assets.

  • How does the video interpret the recent behavior of gold prices and Treasury yields?

    -The video suggests that the recent surge in gold prices and decline in Treasury yields are not necessarily driven by inflation concerns, but rather by a growing demand for safety and liquidity, potentially signaling broader economic risks or instability.

  • What is the significance of Waller's comments about the Fed's mortgage-backed securities (MBS) holdings?

    -Waller stated that he doesn't want any more MBS in the Fed's portfolio, as he believes they are not a good fit, especially in the current environment. This suggests a potential shift in the Fed's asset holdings.

  • How does the video view the Fed's quantitative tightening (QT) program and its impact on the Treasury market?

    -The video suggests that, contrary to concerns, the Fed's QT program has not disrupted the Treasury market, as there appears to be sufficient demand from various investors, including households, to absorb the supply of Treasuries as the Fed's holdings roll off.

  • What is the significance of the video's discussion about the 'basis trade' and hedge funds?

    -The video mentions that the Fed is concerned about the risk posed by the 'basis trade' involving hedge funds buying Treasuries, but Waller's comments suggest that domestic hedge funds are not the primary buyers, alleviating some of the Fed's concerns about this specific risk.

Outlines

00:00

🔑 Federal Reserve Signals Potential Future QE and Portfolio Restructuring

This paragraph discusses comments made by Federal Reserve Governor Christopher Waller in a speech on Friday. Waller expressed a desire to shift the Fed's treasury holdings toward shorter-dated securities and mentioned the possibility of a future asset purchase program (QE). This raised speculation about the Fed's intentions, with some comparing it to the 2011 'Operation Twist' program, which was a way for the Fed to take action without appearing to do so. However, the paragraph suggests that Waller's comments may simply reflect an ideal portfolio composition for the Fed rather than signaling immediate policy changes.

05:01

🏦 Household Demand for Treasuries Mitigates Quantitative Tightening Concerns

This paragraph focuses on Waller's comments regarding the demand for U.S. Treasury securities. Waller stated that the increase in household demand for Treasuries is not driven by hedge funds but rather by actual households and nonprofit organizations. This finding reinforces the view that demand for Treasuries is broad and deep, suggesting that the pace of quantitative tightening (QT) and the Fed's balance sheet run-off is not a significant problem. Waller's interpretation is that the demand for Treasuries comes from a wide range of investors, not just sophisticated institutions, indicating a strong appetite for safe and liquid assets.

10:02

🏛 Gold as a Hedge: Misconceptions and Reality

This paragraph discusses the common misconception that gold is an inflation hedge. It argues that gold is actually a poor hedge against normal inflation or disinflation. Instead, gold's performance has historically been tied to periods of significant monetary and financial stress, such as the 1970s and the housing bubble of the 2000s. The paragraph suggests that gold's recent surge is not due to inflation concerns but rather a demand for safety and liquidity, similar to the demand for Treasuries. This demand for safe assets corresponds to lower interest rates and an inverted yield curve, indicating potential economic risks and a flight to safety.

15:03

⚠️ Rising Demand for Safety and Liquidity: Potential Causes

This paragraph explores the potential reasons behind the rising demand for safety and liquidity, as evidenced by the rally in gold prices and falling Treasury yields despite the Federal Reserve's stance on interest rates. It suggests that this demand may be driven by factors such as recession risks, deflationary pressures, commercial real estate problems, and global real estate issues, particularly in China. The paragraph posits that these risks and uncertainties are likely fueling the appetite for safe-haven assets like Treasuries and gold, indicating a potential economic slowdown or crisis on the horizon.

Mindmap

Keywords

💡Quantitative Tightening (QT)

Quantitative Tightening (QT) refers to the process of the Federal Reserve reducing the size of its balance sheet by allowing bonds it holds to mature without reinvesting the proceeds. This is the opposite of Quantitative Easing (QE), where the Fed purchases bonds to increase liquidity and lower interest rates. In the video, Waller discusses the impact of QT on the demand for U.S. Treasury securities, stating that it has not been a problem due to broad and deep demand.

💡Mortgage-Backed Securities (MBS)

Mortgage-Backed Securities (MBS) are bonds backed by a pool of mortgages. In the video, Waller states that he would prefer the Fed to hold fewer MBS in its portfolio, as they are less suitable for a central bank's holdings, especially in the current environment with low prepayment rates.

💡Treasury Bills

Treasury Bills, or T-Bills, are short-term government debt securities with maturities of up to one year. Waller suggests shifting the Fed's holdings toward a larger share of T-Bills, which would allow the Fed's income and expenses to move in tandem with changes in the federal funds rate. He notes that prior to the financial crisis, the Fed held approximately one-third of its portfolio in T-Bills, compared to less than 5% currently.

💡Basis Trade

The basis trade refers to a strategy employed by hedge funds to profit from the difference (basis) between the yields on cash bonds and derivatives linked to those bonds. Waller mentions that the Fed is working to separate hedge fund data from household data, as they are concerned about the risks associated with the basis trade being performed by a narrow set of sophisticated investors.

💡Reverse Operation Twist

A reverse Operation Twist refers to a potential strategy where the Fed allows its long-term bond holdings to mature while purchasing short-term bonds. This is the opposite of the original Operation Twist in 2011, where the Fed sold short-term bonds and bought long-term bonds to flatten the yield curve. The video discusses the possibility of the Fed implementing a reverse Twist to shift its portfolio toward shorter-dated securities.

💡Inflation Hedge

An inflation hedge is an investment or asset that is expected to maintain or increase in value during periods of high inflation. Contrary to popular belief, the video argues that gold is a poor inflation hedge, as its performance has historically been more closely tied to periods of monetary policy errors and financial crises rather than simply tracking consumer price inflation.

💡Safety and Liquidity

Safety and liquidity refer to the properties of assets that are considered low-risk and easily convertible to cash. The video suggests that the ongoing demand for U.S. Treasuries and gold reflects a desire for safety and liquidity, which may indicate concerns about potential economic risks or uncertainties, rather than expectations of high inflation.

💡Inverted Yield Curve

An inverted yield curve occurs when long-term interest rates are lower than short-term rates, which is an unusual situation and often viewed as a potential signal of an impending economic downturn or recession. The video notes that the inversion of the yield curve, both in the U.S. and globally, coincided with the recent surge in gold prices, potentially reflecting increased demand for safe-haven assets.

💡Recession Risk

Recession risk refers to the likelihood or possibility of an economic downturn or contraction. The video posits that the rising demand for safe-haven assets like Treasuries and gold could be driven by increasing concerns about recession risks, potentially stemming from factors such as problems in the commercial real estate market, China's real estate issues, or other economic uncertainties.

💡Deflationary Recession

A deflationary recession is an economic downturn characterized by a sustained period of falling prices (deflation). The video suggests that the heightened demand for safe assets like Treasuries and gold may be indicative of concerns about a potential deflationary recession, which would be a highly unusual and challenging economic environment.

Highlights

Gold is reaching an all-time high, which is often seen as a red flag, but it may not be related to inflation.

The recent move in gold seems to have been catalyzed by Federal Reserve Governor Christopher Waller's speech, but the focus should be on a different part of his speech related to treasuries and global bonds.

Gold is not actually an inflation hedge; it is a poor inflation hedge. Instead, it is a hedge against gross monetary errors and incompetence.

During the 1970s, gold was a hedge against inflationary circumstances caused by monetary errors, not inflation itself.

In the 1980s and 1990s, as consumer prices continued to rise, gold prices were flat or declining, showing that it does not hedge against normal inflation or disinflation.

Gold's surge in the 21st century was likely due to the housing bubble and monetary policy errors, not inflation risk.

During the pandemic, gold acted as a hedge against lockdowns until August 2020, but then declined as consumer prices rose in 2021, contradicting the inflation hedge belief.

Gold started rising in October 2022 when the yield curve heavily inverted, indicating demand for safety and lower opportunity cost of holding gold.

Waller's speech mentioned a "reverse operation twist," but this was likely just mechanics about an ideal portfolio, not a signal of future actions.

Waller recognized that quantitative tightening (QT) is not a problem because there is broad and deep demand for U.S. Treasury securities, contrary to concerns.

According to Fed data, the increased demand for Treasuries is driven by households and non-profit organizations, not just hedge funds engaged in the basis trade.

The key question is why there is such a strong demand for safety and liquidity in Treasuries and gold, which could indicate recession risk, deflationary pressures, or other global issues.

Treasury yields are falling again, potentially signaling another leg lower and further demand for safety and liquidity.

The rise in gold prices, along with falling Treasury yields, could be driven by increasing demand for safety amid recession risks, deflationary pressures, or other global concerns.

The discussion highlights the importance of understanding the true drivers behind market movements and asset prices, rather than relying on common misconceptions or surface-level narratives.

Transcripts

play00:00

gold is screaming to an all-time high

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which is a pretty big red flag and has

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nothing to do with inflation the most

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recent move seems to have been catalyzed

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by Federal Reserve Governor Christopher

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Waller who gave a speech last Friday but

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the part of the speech that everyone has

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latched on to that's not the part to

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focus on that's not the one that

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actually explains what's happening here

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instead it was something else Waller

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said that gets us closer to the actual

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truth and it has to do with another big

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move being made just now too and that's

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in treasuries and Global bonds the

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markets are telling us something is in

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motion here there's Rising need to hedge

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but contrary to popular perception gold

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isn't actually an inflation hedge in

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fact it is a poor inflation hedge so we

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need to understand what it is that first

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of all Waller said and most of all what

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it is that gold is really about that's

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what we'll talk about today in the

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context of of maybe another big move

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starting in the treasury market but

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Christopher Waller Friday speech in New

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York City it was titled thoughts on

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quantitative tightening including

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remarks on the paper quantitative

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tightening around the globe what have we

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learned it couldn't have been a more

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exciting presentation in paper but what

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Waller said that everyone really focused

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on was in his concluding remarks he said

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a couple things in his conclusion the

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first one he doesn't want any more NBS

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in the fed's portfolio he doesn't think

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they're a good fit uh NBS especially low

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prepayments in this environment a whole

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bunch of stuff about MBS that's not the

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issue here either instead it was what he

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said about the fed's treasury Holdings

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that set off this well mini Firestorm of

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oh God what's really happening here what

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he said was second I would like to see a

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shift in treasury Holdings toward a

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larger share of shorter dated treasury

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Securities prior to the global financi

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ccial crisis which was not Financial we

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held approximately onethird of our

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portfolio in treasury bills today bills

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are less than 5% of our treasury

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Holdings and less than 3% of our total

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Securities Holdings moving toward more

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treasury bills which shift the maturity

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structure more toward our policy rate

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the overnight federal funds rate and

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allow our income and expenses to rise

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and fall together as the fomc increases

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and cuts the target range this approach

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could also assist a future asset Pur

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program because we could let the

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short-term Securities roll off the

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portfolio and not increase the balance

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sheet so from that set that that passage

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people are getting a couple things out

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of it first of all he just mentioned QE

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a future QE is the Fed now starting to

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think about another QE in 2024 and the

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other thing was what people have called

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a reversed operation twist the FED would

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allow its long-term bonds to roll off

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and buy short-term bonds if you remember

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the operation twist back in 2011 which

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was itself a Reincarnation of an earlier

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Twist from a long period a long time ago

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back in 2011 operation twist wasn't

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really about twisting the yield curve

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that's what they told the public when

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you have to remember the the

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circumstances behind all that in

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September 2011 when they announced

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operation twist and voted for it the

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economy had been unexpectedly weak the

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banking system had fallen into a another

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liquidity problem in fact they were

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talking about bailing out the repo

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Market dollar shortage around the rest

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of the world banks on the brink just

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like in 2008 and let's not forget QE QE

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number two had just ended a couple

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months before all of this took place so

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the last thing the Federal Reserve

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wanted to do though they did want to was

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do another QE so soon after the the one

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the run that had just ended had ended in

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other words they couldn't do another qe3

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so quickly because that would be an

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admission that QE doesn't work which

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would have been actually helpful but

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they also knew they had to do something

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because the situation was getting pretty

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Grim what they came up with was a way to

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do something which remember in the fed's

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world view and how they operate doing

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something and more so announcing that

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they're doing something is what mon

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monetary policy is supposed to be

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remember Haru hio coroa from Japan it's

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all about Peter Pan it's about whether

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or not you get people to believe in that

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you can fly

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so operation twist was we don't have to

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admit we're doing another QE just be

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just after QE2 ended while at the same

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time we're doing something we're going

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to be buying some assets don't worry

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about it don't ask too many questions so

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in the context of Waller speech in

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2024 some alarm Bells Are Ringing here

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because operation twist in 2011 was a

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way to do something without appearing to

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be doing something so it natural to

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wonder especially given the passage that

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included a reference to the FED doing

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another QE is that what the fed's doing

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here are they doing something in the

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same way as 2011 getting prepared

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because there's other things going on

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beneath the surface that maybe the FED

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is privy to that nobody else is is this

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a 2011 style scenario a reverse

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operation twist just to put another spin

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on doing something while that might be

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something that it it sounds reasonable

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and understandable to think that way but

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my personal opinion is that I don't

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think Waller is doing anything more than

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exactly what he said in an Ideal World

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this is what our Soma portfolio would

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look like we wouldn't have any NBS

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because MBs are cumbersome and they're

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not they're not ideal for a central bank

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at the same time he would like a lot

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more treasury bills in the S portfolio

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remember why they took treasury bills

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out of the S Som portfolio it goes back

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to 2019 as the Fed was rebuilding its

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Bill Holdings and it led to remember we

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had all that repo problems which the FED

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never colle never connected to

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Collateral but that also led to a do

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something that isn't QE remember October

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of 2019 the fed's not qe5 which was a

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focused purchase on only treasury bills

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because the FED didn't want to be seen

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doing QE back then either they had

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already started cutting rates and they

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really didn't want people to start

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panicking especially when we had a

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recession scare inversion of the cures

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and a whole bunch of repo problems so

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again it's understandable what people

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would make more out of what said because

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every time the FED seems to do something

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like this it corresponds to less than

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desirable circumstances but again the

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FED Tre purchased treasury bills

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exclusively treasury bills in QE not qe5

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but then March of 2020 they realized

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what a big mistake that was and so March

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of 2020 during that collateral shortage

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period they stopped buying bills and

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moved all of their QE elsat purchases

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down the Curve

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and they have been rolling off bills not

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voluntarily they've rolling off bills

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during its QT as well so what Waller is

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basically saying is we're looking ahead

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as if we think things are going to be

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normal and in a ideal environment we'd

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have a lot more bills and no MBS that's

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pretty much all he said he did mention

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about how that would affect a future QE

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because the FED could then just roll off

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its short-term treasury bills and use

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the proceeds to to to fund their

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purchases of longer term notes which

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would be part of the future QE and the

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reason he brought that up is because

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earlier in the speech he said QE is no

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longer an unconventional program it's

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just part of what we do around here and

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therefore from his perspective If the

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Fed wants to manipulate the yield curve

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down the road what better way to do it

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then to roll off bills and use those

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proceeds to fund purchases of long-term

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rates and with the intent of getting

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long-term rates to go down never mind

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that all of this stuff is just nonsense

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it doesn't work that way from wallers

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perspective that's all he was

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saying so if this is not the FED

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restarting something because they're

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worried about the way the world is then

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what did what else did Waller say that

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was act that would actually be helpful

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in understanding what's going on in gold

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and treasury bonds well part of his

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speech was dedicated as the title made

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clear to QT and one of the things that

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people have been talking about with QT

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ever since the which the second one in

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2019 2018 and 2019 which is it was

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really the second one not the first one

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it was the first official one the first

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official QT everybody said well without

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the Federal Reserve the treasury

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Market's going to blow up here

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especially since deficits appear to be

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rising and so part of Waller speech that

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was focused on QT was well we aren't

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really expecting the treasury market to

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go to blow up because there is a deep

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pool of buyers what Waller said was as

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currently categorized the financial

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account household category includes

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hedge funds the Federal Reserve board is

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working to segregate hedge funds in this

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data set in the interim the board

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publishes separate data on the balance

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sheets of domestic hedge funds that's a

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key key Point here using the supplement

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supplemental data I find that it is not

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the hedge funds that are responsible for

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the increase in household market share

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this means the increase is driven by the

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other household investors including

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actual households and nonprofit

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organizations because that's another big

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part of

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QT as the feds push F fed no longer buys

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any long-term bonds or short-term bonds

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or any bonds it's R letting them roll

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off its balance sheet this passive

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quantitative tightening that means other

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people have to step up other funds

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institutions or households to buy what

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the FED isn't buying and while people

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have worried that there's going to be a

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limit especially with the treasury

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Department issuing so much debt and the

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federal government going completely

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insane thus far it hasn't been an issue

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and one of the reasons it hasn't been an

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issue as Waller was alluding to is the

play10:06

basis trade for from hedge funds and

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I've talked about this before in a

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previous video except a couple previous

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videos what that what the basis trade is

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and what it means but for as far as

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officials are concerned they hate the

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basis trade they think it's a big huge

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risk and so if it's only hedge funds

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that are buying treasuries that's an

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enormous problem at least in their mind

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but what Waller was saying is that when

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you look at the data what data we do

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have we find that well no it isn't it

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doesn't appear to be domestic hedge

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funds that are actually buying all these

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treasuries that the FED no longer is

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instead what he says according to the

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FED data it is actually households that

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are stepping up and buying not through

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hedge funds but households themselves

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now what I would add and I I bet Waller

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would too if he if he felt like talking

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more the truth what he would say is that

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overseas hedge funds is another story

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offshore hedge funds that are indeed

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engaged in the basis trade but the

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overall point remains regardless there

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is demand for for treasuries independent

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of hedge funds in the basis trade let's

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go back to Waller one more time what do

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I make of this finding my interpretation

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is that it reinforces the view that the

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demand for US Treasury Securities is

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Broad and deep the buyers are not a

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narrow set of deep pocketed

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sophisticated investors but rather of

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the American public as a result the pace

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of runoff is not a problem as I've

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talked to as I've said and pointed out

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all numerous times rates are despite the

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huge is issuance and treasuries rates

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are actually a little bit lower than

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they were at the end of 2022 despite

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another another bunch of Fed rate hikes

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in between and quantitative tightening

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there is demand for treasuries so all

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that's well and good but it should cause

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everyone to ask the next logical and

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obvious question why is demand for

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treasury so Broad and deep that's the

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part that we need to think about Waller

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is basically saying there's seemingly an

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endless demand for safety and liquidity

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which you would then think that people

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would would realize why is there demand

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for safety and liquidity if we're

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heading into a soft Landing or if we're

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heading into an inflationary environment

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the last thing that's going to be in

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demand is safety and liquidity but we

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see time and again demand for safety and

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liquidity in form of government bonds

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but also in the form of safety that's

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gold so demand for safety and liquidity

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in treasuries demand for safety in

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gold as far as treasuries go treasury

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yields are falling back to back down

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again in fact the the 10year treasury

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today was about

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4.14% which is its lowest in over a

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month which rais raes a couple of

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questions here a couple possibilities as

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we've been saying all along after an

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enormous huge historic rally in the bond

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market we expected interest rates would

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back up and go maybe sideways to

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slightly higher for a couple months well

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it's been a couple months and unless

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something substantial has changed we do

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expect another leg lower in interest

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rates could we be seeing that now and if

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we are what would that mean well if we

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do see another leg lower in treasury

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rates that would mean demand for safety

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and liquidity and that if if there was

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other corroborating evidence for

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especially the safety part that make

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make that may make the possibility even

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more compelling so let's talk about gold

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gold is commonly cited as an inflation

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hedge when in truth it is a terrible

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inflation hedge that is a misconception

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that has developed over many years now

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you go back to the 1970s the great

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inflation gold was a terrific hedge but

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not against inflation it was a hedge

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against broadly speaking some of the

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worst monetary and financial

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circumstances that just so happened to

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be inflationary real inflationary so it

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isn't that gold was a hedge against

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inflation gold was a hedge against gross

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monetary errors and incompetence and you

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can see this in any number of ways think

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about the 1980s plot the price of gold

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against the CPI the CPI vastly

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outperforms gold in the 198 80s Now

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consumer prices were still rising at a

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relatively decent unhealthy rate but it

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was nothing like the great inflation but

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still consumer prices were rising and

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gold prices were at best flat to lower

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depending upon where you start your

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measurement if you start measuring

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before the last surge in 79 and 80 gold

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prices were relatively flat through the

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1980s even as consumer Prices rose and

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that continued in the 1990s consumer

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prices they more disinflationary they

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didn't stop Rising gold prices actually

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declined and got down to around $300 an

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ounce by the year 2000 even as consumer

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prices continued to move higher so as a

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hedge against normal inflation or

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disinflationary levels of consumer

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prices gold underperformed drastically

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and it wasn't really until July 2005

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that gold finally caught its big bid the

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21st century bid was that because of

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inflation risk or was it because gold

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investors and its demand for its hedging

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properties understood the risk of the

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housing bubble another gross massive

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monetary error just in the opposite

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direction as the 1970s gold surged

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heading into the global not financial

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crisis the pandemic era or the 2020s era

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is it behaved contrary to the popular

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misconception about gold being an

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inflation head gold served during the

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pandemic and lockdowns up until August

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of 2020 and then once consumer prices

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really started to go go up in 20121 gold

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was flat to lower and it was flat it was

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flat to lower until March of 2022 got a

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little bit of a rally and then sank with

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Rising interest rates up until October

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of 2022 once the yield curve really

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started to invert and more heavily

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invert and not just the US Treasury

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curve but around the rest of the world

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that's when gold started to rise now it

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looks a lot like the stock market has

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behaved over the last couple years but

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that's because gold corresponds to the

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safety bid lower interest rates not only

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is it higher demand for safety the

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opportunity cost of holding gold is safe

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instruments that yield that yield

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something so as as the bond market and

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interest rates in the bond market

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started to level off and invert you can

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see the demand for gold rise lower

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opportunity cost but also also the same

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demand for safety gold and treasuries

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are in one sense two sides of the same

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coin so Christopher Waller's twist last

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week the reverse twist was really a big

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nothing it's the FED talking mechanics

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of an ideal portfolio however he did

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recognize that QT isn't a problem

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because I wish he would recognize the

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next step or maybe he does he doesn't

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want to say it

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demand for safety in liquidity seems to

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be un no bottom to it but as we've seen

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the big rally last year and into this

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year and now gold price is reaching a

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record high we have to ask there's this

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bottomless demand for safety and

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liquidity that seems to be even more

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bottomless just recently why might that

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be demand for safety and liquidity

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treasury yields go down even as the FED

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says we have no plans to cut rates well

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maybe that's the case but the the market

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is moving lower anyway gold prices are

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moving higher what would cause demand

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for safety and liquidity to increase

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over and above what it has been for all

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this prolonged period to begin with and

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there's any number of reasons for it

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that's the recession risk the

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deflationary recession risk the problems

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in commercial real estate may be

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starting to Bubble Up China China's real

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estate problems we just talked about

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this yesterday with China vany any

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number of reasons that would that would

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explain beond Christopher Waller's uh

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concluding remarks what's really

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happening in the marketplace why is

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there so much demand for safety and

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liquidity in form of treasuries but also

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safety in the form of gold with

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everything from recession to real estate

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globally it actually makes a lot more

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sense than a reverse operation

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twist money risks and money Evolution

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well I just had a good conversation with

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Manny ringcon Cruz about that very topic

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the crypto bubble what's actually behind

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it and where the Boom is in the crypto

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space that's the video I've got link

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below as always I thank you for joining

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me huge thank you your doll University

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members and subscribers until next time

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take

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care

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