Rafi Farber’s Warn! Why I Changed My Entire Prediction on Gold and Silver Price

Rafi Farber’s Warn! Why I Changed My Entire Prediction on Gold and Silver Price

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So what happens then what happens if this wonderful program is not extended Beyond March well I’ll show you a very simple graph which will show us the magnitude of what is being suggested here join rafy Farber on a quick dive into Financial Dynamics today we Spotlight the Federal Reserves drama

Featuring the vice chairman for banking supervision picture this a $400 billion Regional Bank bailout program Making Waves since last March March is on the horizon will those dollars find their way back buckle up for a Brisk Journey Through the twists and turns of economic decisions we’re going to start this

Week’s silver report discussing the bank term funding program how it might not be extended and what happens then basically it speeds up the pace quantitative tightening to beyond the amount of dollars that are left to support it in the spare tank so it’s not a very good sign for the inflated kenian bubble

Economy we’re going to talk about the bond market there’s about $2 trillion that are due to be sold this year which in addition to the two trillion more dollars that have to be shifted from the bills category due in one year or less to the notes category

Due between two years and 10 years that’s about $4 trillion dollar in treasury notes that have to be issued before the end of the year and there aren’t that many dollars in the system there are barely a tenth that amount of dollars in the system which means the

FED is going to have to print more dollars very soon probably within a month or two before we have another financial crisis though timing is always a tricky thing as you all know and the Consumer Price Index the CPI came out today which would be Yesterday by the

Time you’re watching this and the shelter index was what dragged it up past expectations and because the shelter index is so stable and prices are very sticky especially owner equivalent rent that probably means that CPI has bottomed out and we are headed for a new wave of higher Consumer Price

Inflation so anyway let’s get to it the latest news out from Fortuna Silver Mines January 10th 2024 at 2 a.m. Pacific that is a nice time to be awake Vancouver Fortuna Silver mins is pleased to report that the company has paid down an additional $41 million of dving

Credit facility at the end of the fourth quarter 2023 using cash on hand well instead of going into the details I’ll just point out that $41 million paying off debt paying off debt does shrink the money supply and Fortuna is not the only company that’s paying down debt this

Continues to show that Fortuna is one of the more responsible gold and silver miners with their finances which again is why I have it I own it in my own personal portfolio of course do your own due diligence in picking these stocks if you pick any of them at all in any case

Let’s continue with this week’s silver report I’m going to begin on a simple technical note here I’m not sure what has happened by the time you’re watching this but silver is dancing across the 200 weak moving average here the red line which is been bouncing off and

Through and off again uh this red line the 200 we moving average has been actually remarkably uh stable going up at a steady pace for uh at least the last two and a half years we see from 2021 it was somewhere around it was about $19 in 2021 and now it is at

$23 so despite all this volatility which is typical in silver the 200 week moving average has been moving up pretty steadily uh and that is a sign of stable money though of course silver has not yet been remonetized but it will in the end game if only briefly which is when

You’re going to have to spend spend your Stacks which is pretty much my Mantra these days so this is from The Wall Street Journal which I uncovered today uh it says goodbye to the fed’s 2023 crisis facility the btfp the bank term funding program another in other words the Regional Bank

Bailout program we’re gonna get into the details here these details are going to be pretty scary once you understand what they mean if this guy is serious in ending the program so the first two paragraphs here it says a top fed official a top top men a top fed

Official on Tuesday signaled that an emergency lending program set up to counter The Fallout from the failure of Silicon Valley Bank really to counter the fall fall out from the fed’s raising interest rates would likely wind down as scheduled in midmar Michael bar the fed’s vice chairman for banking

Supervision suggested the bank term funding program would not be extended and so what happens then what happens if this wonderful program is not extended Beyond March well I’ll show you a very simple graph which will show us the magnitude of what is being suggested here here we’ve all seen this before

This is the fed’s balance sheet here’s the apocalypse September 2019 going up a little bit and here’s the covid lockdown insanity and we went pretty much vertical here and then we were slowly moving up and up and up until around the end of uh the middle of

2022 and we start to do QT oh here’s the first problem look at that just after a little bit of QT you have this is the btfp this is the effect on the balance sheet what happens is the Fed takes in these underwater bonds onto its balance

Sheet its balance sheet Rises and the banks that took advantage of this that gave the FED these assets represented by this bump here from 8.34 trillion to uh 8.73 trillion so what’s that like $400 billion dollar or something what’s 8.3 quick math 8.3 to 8.7 yeah uh $400

Billion at least it’s going to be more than that because remember this is fighting the other other qts and other sectors of the bed fed’s balance sheet so let’s say I don’t know like a half a trillion dollars something around a half a trillion dollars that is the uh the

Bank term funding program I could go into the exact chart but you know whatever let’s just estimate it if we’re off by 100 billion who really cares so if this program gets shut down in March and they are oneyear loans for face value of underwater bonds so what

Happens is that the banks that took these bonds between the dates of March 8th 202 23 and March 22 2023 they have to pay those loans back by March 8 2024 and March 22 2024 because it’s a oneye loan so in in in March in March these Banks if the

Program is not extended are going to have to pay back a half a trillion dollars in loans and shrink the fed’s balance sheet when you pay money to the FED right when you pay back a Fed Loan the money the dollars goes to the fed

The dollars go to the fed and then the FED takes those dollars out of existence so if the btfp is not extended that is the effect of the equivalent of QT of about a half a trillion dollars by March 22nd is the financial Plumbing going to

Be able to take that I don’t think so so I’m pretty sure the btfp one way or another is going to be extended but let’s move on there’s one more thing I wanted to point out about this chart I began it over here uh January 17th Jan

24th 2018 this was the first QT before the rep Apocalypse of September 2019 so we have here this was the peak of the balance sheet until then about $4.44 trillion do and then they executed quantitative tightening until about September 11th 2019 at $3.77 trillion and then all of a sudden

The apocalypse hit interest rate skyrocketed to 10% and they had to print more money so the length from here January 2018 September 2019 is about what is that about 20 months well if we look at the length of the current QT right we had the balance sheet Peak

Around here May 20122 and we are now Qing until uh the end of 2023 so that makes the calculation easy uh it’s about 19 months it’s about the same length almost the same length as this QT until we we hit a rep apocalypse over here so judging by that history we’re pretty

Damn close we’re about a month or two away from something happening in the plumbing maybe even less if we go to the next tab we’ll see that the reverse Repose if we zoom into a onee chart here we can see that the rrps the reverse repos the spare dollars in the tank that

Were printed in 2020 and 2021 are down to$ 626 TR billion dollar so we got about about a month until these zero out because as the treasury sucks up money to fund the deficit they take it mostly from this facility and finally I wanted to go into the CPI into the Consumer

Price Index because something is happening with owner equivalent rent and shelter which is keeping the CPI elevated which means that the FED is not going to reach its Target of 2% we have here owner’s equivalent rent at 6.7 % this is the biggest component of the CPI by far but 6.68% actually

6.68% if we look all the way back to the history of the owner’s equivalent rent index it has never been this High except for here was the the previous high in April 1986 at 6.65% we’re now at 6.68% 6.68% and yet we were higher over here

So with the except of this brief period over here which we just experienced the owner’s equivalent rent index has never been higher and if we move to a uh a different version of this graph if we change to a percent change view of this graph we see that the percent change

From last month is about 0.5% and we’ve never really been that high either since around 1990 so this index is headed higher and so is the CPI there is no way the FED is going to reach its Target of 2% on the CPI and we are headed towards a new

Round of consumer price inflation which will make rate Cuts very very difficult but they will have to happen anyway because we are at the verge of a financial crisis in the plumbing as I showed you in the reverse repos and because of the bank term funding program

Especially if it closes we’re going to be in a combination of a highly inflationary environment with a financial crisis which is going to force printing of ungodly amounts of money even as consumer prices are continuing to rise and what do you think happens to gold and silver in that scenario we have

A late 1970s 1980 scenario and I believe that will lead to the endgame sometime this year maybe later in the year though I could always be wrong as I have been wrong before but this is really pushing it now and something is has got to give

Pretty soon we’d like to thank you for joining rafy Farber on his financial Journey March marks the turning point in the Federal Reserve a $400 billion bailout of regional banks will those dollars return check back for more updates stay tuned for more updates on gold silver Bitcoin and other global

Economic Horizons subscribe like and hit the Bell if you enjoyed the ride until next time stay up toate and curious He