Hey There Income Hunter,

This banking crisis is being used as a smoke screen for a much larger issue that may blow up the Fed inflation fighting plan. 

Since the Fed was created in 2013, its primary role was always to maintain a deep and liquid bond market to support government borrowing.

Now, as bond supply outweighs demand, the Fed needed an alibi to print more money to support it … The Bank crisis gave them the cover to launch stealth QE to buy the regional bank’s bonds.. 

So, now Powell is riding two horses with one ass, selling bonds into the big banks for QT and buying them from the smaller banks with QE…  

Well before the summer is over the Fed will go back to all out QE.

Today I’ll show you the only money flow you need to focus on. 

Fed May Soon Be the Only Buyer of Bonds

Similar to the 1940s when government to GDP was as high as it is today, supply of bonds outweighed demand and the Fed was instructed by the government to be the buyer of last resort.

That day is coming in the near future as foreigners turn from buyers to sellers and the government needs to issue greater amounts every year. 

Check out the chart below showing foreign net selling of bonds while issuance continues to explode higher. 

The bottom line is the US bond market is drowning in never ending issuance …

In the meantime banks have stopped lending into the economy, which will weigh heavily on equity valuations. 

Now, once the Fed is forced to abort its tightening cycle and go back to QE, inflation will soar to new highs …

This will move money out of stocks and bonds into real assets like precious metals, commodities, real estate and industrial equities.

The Trade of the Decade

I have been crashing lately by purely focusing on selling mostly stocks for now and buying really assets.

Check out the chart below illustrating a major shift in money flows from stocks and bonds into the Bloomberg Commodity Index (Ticker: BCOM)

We are in the very early innings of this trade and consider this thought for a minute; There is a fraction of investable capital sitting in commodities today … 

And as central banks go back to printing money to fight a global recession investors will sell much of their stock and bond holdings and move into the “safer” real assets that will protect them from inflation. 

I believe we will see 2023 and 2024 see wider acceptance of real assets and it will move superfast …

Don’t miss the greatest trade of our lifetime … Dollar cost average into some physical gold and silver and purchase commodity and miner ETFs.

Do not let our policy leaders devalue your wealth … Check out the free Power Income newsletters at Optionpit.com for more insight on the macro forces driving money flows. 

In the meantime …

Live and Trade With Passion My Friend,

Griff