The Heresy Financial Podcast

There's a lot of disagreement right now about the financial position and the health of Credit Suisse and whether or not they're about to fail and start taking down other banks with them and causing more and more problems. So, I'm going to settle the debate for you and give you the answer on exactly the position that Credit Suisse is in right now and what people should be concerned about, how far things might go before somebody like a central bank steps in.

Did you know that over half of Americans are stuck in credit card debt? According to a recent poll 60% of Americans have been stuck in credit card debt for a year, or longer. Let me be very clear with you. This is not the time to be stuck in credit card debt. Not when rates are rising, when liquidity is dropping, when the economy is rolling over, headed into a deep recession. And the people who have the power to turn the lights on or off are saying we are not making things easier any time soon. We are seeking unemployment. We are seeking a recession, lower demand, higher interest rates, economic pain to stop inflation. This is not the time to be in debt.

Is the United States currently being successful at inflating its debt away? Well, it depends on who you ask. If you look at standard economics, it would say that the government can borrow money. And then when it spends that money, as long as it spends it in the right way, that's going to stimulate economic growth. And then that economic growth will result in more tax revenues, meaning that that debt paid for itself, and then some. One of the byproducts of this is that prices go up along the way. And so many people say that the government can just inflate its debt away, and that's why it chooses inflation. But we get into a problem with economies when the public debt exceeds 90% of GDP. So where is the United States and where is it in the cycle of trying to inflate its debt away since it's got a lot of debt and we've got a lot of inflation. Which one is winning?

Is anything even real anymore? Well, it turns out that increasingly the answer is no if it is an official statistic or number published by any government organization, and that is especially true of the recent jobs report. In this video, we are going to look through a few key metrics that the government and the Federal Reserve are looking at in terms of jobs and where unemployment is currently at in the United States of America. We're going to show how the situation is actually a lot worse than they think and this is especially dangerous because they're using these job numbers to continue to tighten. So, they're saying the jobs market is strong so we can still combat inflation and continue to tight when in reality, the jobs market is probably pretty weak.

Breaking news, the UK is breaking! The UK just had a major move in financial markets with number one, the Bank of England reversing course, pivoting and now committed to unlimited quantitative easing, buying up as many government bonds as needed to stop the financial crisis that was unfolding within hours centered around pension funds, invested in government debt with massive leverage. This is all tied in as well to the tax cuts that were recently posed from the government that were causing a big strain on financial markets through increased borrowing costs to the government. And I'm going to explain everything that's going on right now and what might happen next.

The Bank of International Settlements just came out with a new way to measure the market conditions for key areas of financial markets, including the U.S. Treasury market. And what this indicator is showing right now is that the volatility and the lack of liquidity in the U.S. Treasury market is now worse than it was during the great financial crisis when Lehman collapsed.

Japan is in trouble. Their yen is collapsing as they are trying to maintain yield curve control. And so, they intervened to prop up the value of the yen for the first time in decades last week. Now, it turns out that the Federal Reserve may be assisting them. As Bloomberg points out, Japan may have a pile of dollars it can tap at the Fed's reverse repurchase facility, accessible by foreign central banks. However, I think what Bloomberg is talking about here is actually the opposite of what's going on at the reverse repo facility. There is not enough evidence that Japan has any significant amount of money with the Fed. Instead, it looks like the Fed is going to have to be actively assisting Japan with dumping those Treasuries, using the opposite the repo facility, specifically the one for foreign central banks.

The price of cars especially used cars, or one of those surprise things that went up in value during 2020 and continued to go up in value during 2021. It seemed like there was a mad scramble to buy any car you could at any price, and they just went up. In fact, used cars, outperformed things like Bitcoin, gold, stocks, and real estate. It was absolute craziness. So, the question now is, was that sustainable? Is that going to continue? And what is happening now, given the fact that many people are starting to talk about a sub-prime auto loan crisis or people are starting to be delinquent and default on their auto loans?

Interest rates have been skyrocketing recently because the Federal Reserve is not blinking in the face of struggling Americans. They're trying to crush the inflation monster regardless of how many 401ks they destroy along the way. This means that mortgage rates are going up; car loan rates are going up; credit card rates are going up. And key here, the United States government's debt interest rates are going up. But it's not as you might think, because that's making many people ask the question, how high can interest rates go before the federal government defaults and can't pay their bills? Well, the answer is really a different question. The question is not how high can interest rates go, but how long can interest rates stay high?

It's happening... maybe. Japan might have just started the global treasury liquidation. We've been talking a little bit on this channel recently about how the United States Treasury is the foundation of the entire global financial system. But what happens when you build your house on a foundation of sand? Eventually, the house comes crumbling down, and the way that starts in the financial system is by the world getting rid of Treasurys. Japan has historically been one of the largest treasury holders. They have not been buying them recently. And now, because of the problems with their currency, they've intervened to stop the collapse of their currency. And they may have just started at the beginning of the end of the current global financial system.