If you still think it’s all just one big club and you aint in it, think again. I recently had Matt Erickson from the Kingpilled Podcast on the show to discuss these matters. He’s been attaching it from the PayPal Mafia angle, which seems to converge nicely with the “Team Fed vs the Globalist” narrative that I, Tom Luongo, and others have adopted. As time passes we’re seeing this war among giants continue to play out, almost blatantly as if they themselves are saying the quiet parts out loud…
For those of you who are new to QPOL, welcome. I’ll fill you in on the “thesis”, and we’ll cover some updates on the Fed vs the world and how all this might look in the future. For a primer, check out my pieces:
Fracturing of The Big Club | QPOL Issue #54 (in-depth breakdown of the thesis)
Don’t Fear The Reaper | QPOL Issue #65
Powell Rebuilds the Financial Rails | QPOL Issue #62
How Powell’s “Bailout” Saved the American Banking System | QPOL Issue #41
The Rise and Fall of Sam Bankman Fried: The SUM Report 11-13 | QPOL Issue #20
And probably most importantly, The Death of the Eurodollar System | QPOL Issue #39
And
The gist of the thesis is seen through the lens of monetary policy and how Jerome Powell (and the Wall Street commercial banks) is actually a patriot signing for US financial sovereignty from the City of London.
TLDR, Powell is raising rates to destroy all the offshore dollars (Eurodollar system)The Fed’s America-First monetary policy is bankrupting the usual suspects we all love to hate… It’s a war between Powell’s Fed (monetary) vs Yellen’s/the White House’s Treasury (fiscal) that’s littered with globalist traitors who seek to bankrupt the financial credibility of America and take what’s left after the dust settles.
Doing this has been primarily done through raising rates, yes, but also re-indexing our debt to SOFR instead of LIBOR. The globalist powers that be at the City of London no longer control US monetary policy, America does. The Fed is the central Bank of America now, not the world. Until now, America never truly had its declaration of independence and was always ruled under the British Crown/5 eyes. Not anymore.
This wealth transfer and return to economic normalcy won’t happen overnight, but it’s happening before our eyes. Any bank/zombie company that goes down is a needed correction and a hit-job by the “pay-pal mafia” of Wall Street and the sovereigntist forces of the Fed like Powell and Dimon. The fall of Silicon Valley Bank was an example of a hit-job by the Fed. It only survived under the Bernanke Doctrine of free money under ZIRP. Ergo, Elite Theory via monetary policy. Not convinced Powell is a white hat? He’s 8th generation Virginian Aristocracy. Thats American (America First) as it gets. Oh and he’s a gentile. He graduated from a Jesuit school. He’s certainly not cut from the same cloth as the Fed chairs before him (Greenspan, Bernanke, and Yellen).
After Dodd Frank and all the banking regulations were passed post GFC, the bankers had to move their free money chicanery into the unregulated waters of private equity. Now Powell is going after them and destroying their creation of cheap credit (which causes economic distress in the first place) via raising rates. “Team Fed” as I call them, and picking the winners and losers.
It might not all be completely coordinated between these Wall Street and PayPal Mafia white hats. It could simply just be agreements of aligned interest for the sake of survival and preservation of their business and efficiency as a country, as Matt Erickson mentioned during our interview in the A16Z essay. There is definitely a collective consensus that what’s good for American industry and societal prosperity is an America First agenda. The globalists wanna destroy what American capitalism was built off of: the creation of private capital. If you do a CBDC, then Jamie Dimon hands over the keys to his Ferrari to Larry Finke. Finke has made MANY enemies on Wall Street, as stated multiple times by Danielle DiMartino Booth. It’s the conflict as old as time: Nationalism vs Globalism.
Number Go Up, GloboHomo Go Down
As I write this, Bitcoin has just had the highest daily close in its history, and is flirting with breaking its all time high. As far as Bitcoin is concerned to the thesis, all of this is bullish for Bitcoin because the Fed has the incentive to put it and gold on on its balance sheet and let the price appreciation offset unfounded liabilities and pay out a percentage of treasury coupons in gold and/or bitcoin. I wouldn’t be surprised if Bitcoin is already being used as collateral in the REPO markets. Bitcoin won’t be used as a medium of exchange, but it’s definitely gonna be a reserve asset and supreme tier of collateral. And since Tether holds most of its reserves in US treasuries, it’s arguable and likely that Tether is backed by the white hats at the Fed and on Wall Street.
If we have it our way, the US sovereigntists win. The globalist war mongering scum dependent on free money and the continuation of the British empire with the US as their proxy, is who’s losing and whining the most to Powell because they need lower interest rates to steal elections, overthrow governments, and fund foreverwars.
The “bad guys’” goal is to ultimately bankrupt America and force it to default, leading to the CBDC future. Will that succeed? Probably not, but these neocons as sick psychos enough to try.
What the market does is anyone’s guess. As you read my stuff, you’ll find I’m realistic, but optimistic. It’s gonna be bad, but it’ll just be much worse in Europe and capital flight will flee the EU and seek safety in the US.
Twist and Shout Doom Porn
Let’s ask ourselves why the White House (globalist commie traitors) would say the following…
Usually when they say these things, the opposite happens and a collapse or financial incident occurs. Look up the jawboning from Janet Yellen and others media appearances that happened before the Great Financial Crisis. However, this time is different, and the Fed has tools to fight a crisis. Today however, we have quick access to countless sources of information to the point where twitter accounts think they have enough material to predict when the next crisis hits…
If there IS a failure or crisis of some kind, it’ll be a hit job by the Fed towards those who deserve it. thats what happened to SVB and ilk, and will continue with commercial real estate. The white hats on Wall Street are gonna stick it to their enemies that only survive during times of cheap money. This is the beauty of Powell’s higher for longer…
European manufacturing is moving to the US because of the horrific policies passed by their globalist, commie government. Yellen has been trying to undo this very thing from happening by doing YCC (yield curve control).
Here’s an example of the Fed weaponizing monetary policy against the treasury in real-time: Reverse Operation Twist.
Before we get into the details, first of all someone needs to tell Vince Blanci to stop saying the Fed will do QE? It’s disingenuous at worst and inaccurate at best. For the record Vince does excellent work and I consider him as an internet friend and alley, but I’ll provide clarity here where it’s needed.
He already said in this article the Fed won’t cut rates. QE implies ZIRP. For those who need a refresher, QE (quantitative easing) means the Fed will buy assets from the market but requires interest rates be at zero (ZIRP) to do so. Thats the BERNANKE DOCTRINE as we know it! This is explicitly against Powell’s Doctrine of Higher For Longer.
So how exactly am I supposed to understand this “Reverse Operation Twist”?
The original operation twist is yield curve control: selling/issuing short term debt and buying long term debt…
This is what Yellen has been doing to help Lagarde (president of the European Central Bank, or ECB) to keep capital from fleeing Europe into the US by manipulating the US/German 10 yr spreads to make German debt look more attractive of an investment than US 10yr bonds. Specifically,Yellen has been helping Europe by doing YCC via issuing (selling) short duration debt (bills, notes, anything under 10 years), and sitting on (buying) long debt. This inverts the US yield curve and hides the true value of investment in the US economy.
Traditionally, you expect to get paid more from your bond the longer the duration is. You’re simply being rewarded for your low time preference and investment in said country. Most of finance is indexed to the US 10yr. If that bench mark looks undervalued compared to German debt on paper, then the US looks like a less safe place to invest your money and capital flees from there back into Europe.
It’s all about capital flight, folks. The globalist goal is to ruin US financial and political credibility. They need to protect themselves because they know Europe is bankrupt and has no collateral (unlike Russia who sits on the Heartland/World Island of resources). They’re trying to steal US wealth to prop up whatever is left of the EU. Therefore, they need to lobby for more stimulus and aide packages to Israel, Ukraine, or wherever (and most recently issue European war bonds) and use those funds to launder into their financial system to prevent it from collapsing. To add to the mix of crony schemes, Yellen has been openly suggesting the idea the US should drive Russian foreign reserves and give that money to Ukraine. That would be a US economic blood bath because nobody in the world would trust the US and pull out all their investments. The global south would rug pull America, further helping the globalists accomplish the US’s demise.
Now, back to the lecture at hand. Obviously, Reverse Operation Twist would then be the OPPOSITE! It benefits the Fed by buying short term and selling long term rates, no? That FLATTENS the yield curve and plus they’re STILL doing QT (quantitative tightening, where the Fed’s balance sheet shrinks as assets roll off/mature) by $100B or whatever it is EVERY MONTH!!!
Shortening the average duration of the Fed’ holdings is a purely hostile attack towards the Treasury. The Treasury is on track for interest payments to exceed tax revenue (the government owes more to its investors than what it “profits” from taxes) by 2040. If this new policy of Reverse Operation Twist can be held in place, that might be accelerated by 5 or 10 years. Putting the Treasury on a shorter leash gives the Fed the power to take away its lifeline at a moment's notice, which eventually and inevitably forces Congress to beg for budget cuts.
A Monopoly on Sovereignty
SOFR is the real Declaration of Independence. It arguably reaffirms the Fed’s monopoly on the cost of dollars. Unfortunately we’ll still be stuck with usury for the remainder of this century I think. However, the cost of money will actually COST something. It won’t be easily rigged. In fact, these new regulations rig the system against the globalists, and leverage and collateral requirements from Basel III play a critical role in all of this.
No longer can market participants use junk bonds as collateral on an exchange to go borrow tier 1 collateral assets anymore (US treasuries). In order to borrow dollars, you need to post treasuries. I’m sure that was always the case, but it was optional. From what I understand, people used junk as collateral. Now price discovery will actually be possible and these leverage/collateral requirements in addition to rates above 0% will quell the offshore dollar system because it’s now indexed to SOFR. Money isn’t free anymore. No more “money printer go brrrrrr.”
Monopolies deserve every single iota of respect and profits they’ve amassed. The monopoly game board is being reconstructed, thanks to the Fed and other counter elites on Wall Street and the monetary regime that’s putting national sovereignty first.
In Zero to One, Peter Thiel states current problem is that the game is rigged by crony capitalism. Like the game monopoly itself, you can’t change the structure and dynamics of the game board. In real life, you can…
That’s literary what’s happening under the hood of the monetary system under a Powell Fed with things like SOFR, Basel III, etc. Divorcing the US from Bernanke Doctrine of ZIRP. Thats what Higher For Longer means. True price discovery. Powell and Wall Street is changing the economic game board. This is why the US divorced itself from LIBOR. They got off the globalist game board.
Now, the US has the monopoly on the cost of money/debt indexing rate based on a collateralized interest rate that’s based off of domestic economic activity. now the rest of the world works from that benchmark. It’s not free, manipulated by the City of London anymore.
Suffice to say, this time is truly different and a new political zeitgeist is forming amongst the elites against globalism. “Let’s be America first, but BRICS and everyone else in the world can be their own country too.” Matt Erickson struggles to come up with a term. For the past few years, I’ve simply called it sovereigntism. That’s what every nation wants. Sovereignty, respect for that sovereignty, and peaceful economic cooperation with the rest of the world.
~ Mr. Pseu
If you enjoy the content, consider supporting my work for less than what a blue check mark on twitter costs you… 🙂
For more insights and musings, follow me on Twitter @MrPseu
For business inquires, contact heyQPOL@gmail.com
Tip Me on CashApp/Bitcoin:
bc1qhlqefvm3f6mc33k7shgzns299wsgzc9jd9puxs