The acronym for the Fed’s new Bank Term Funding Program is BTFP.
What that should actually stand for is Buy The Frickin’ Pause.
Why? Because what the Fed has done is create stealth quantitative easing.
Think about this for a second …
The Fed will buy bonds from US banks AND US branches of foreign banks and deposit the proceeds in their accounts at the Fed.
That is the definition of QE!
Gold and Bitcoin have gotten in on the joke and many other sectors will soon.
Today, I will share proof of QE and how you can double or even triple your trading account in the next couple of months.
“Not QE” Asset Purchases = Yield Curve Control (YCC)
I have been warning about the crazy levels that bond volatility has soared to …
The MOVE index (below), which is the VIX for bonds, has signaled that the Fed has lost control of the bond market …
So, how does the central bank regain control?
By buying back bonds buried on bank balance sheets at unrealized losses.
The bonds on bank books were trading at a discount to par, but now banks can sell those bonds for up to a year to the Fed at par (100).
Catch that? The Fed is paying full price for bonds that aren’t worth full price.
BTFP is set to last a year (a timeline that can always be extended), and he Fed is putting a floor on bonds priced below 100 for that duration.
What Does This Mean For You?
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This is inflationary … Gold and Bitcoin have certainly reacted that way …
- The BTFP program also creates a “two-tiered bond market” – one price for banks with US branches, and a different (lower) price for everyone else.
Just another rule change in the US bond market that will discourage foreign central banks and others from holding US bonds.
- All this proves is this bailout wasn’t for banks … It was a bailout of US Treasury and mortgage bonds due to the spike in bondvVol.
The bottom line is that saving the bond market is more important for the Fed than fighting inflation. They can deny it all they want but the proof is in the pudding.
Two conclusions:
- The Fed is back to adding stimulus to the markets and that is inflationary.
- The banks are back in control with hundreds-of-billions of liquidity being added to the banking system. They can now squeeze the market higher and give themselves a chance to get out before inflation spikes higher.
What’s the Trade
The trade is more of a BTFP portfolio that will take advantage of the “new” Fed position and solution to the a bond crisis.
Power Income has been positioned for this since the beginning of the year and has just this week closes winners that returned:
78%
48%
136%
35%
30%
67%
I see a much bigger move coming and will share the full portfolio, the percentages for each sector and how to manage it …
For the move I see coming in just the next couple of months, call 1-888-872-3301 and get all the details from our Customer Care Team today starting at 9 a.m.
Let’s Go!
Live and Trade With Passion My Friend,
Griff