They don’t really know what’s going on and the tools that have been set up to clear the sewers in a time of acute stress are not going to work. The next clog is going to lead to serious problems, which are going to lead to multi-trillion dollars in money printing, which are going to lead to gold and silver making a moonshot in the end game. In my estimation, whenever this final crisis hits, that will be the beeline to the end game. And from that point of the final printing beginning, I think we only have months until the dollar completely collapses in gold terms.

And therefore, in all other terms as well, because gold is money and the dollar is only a gold derivative. The tools that the Fed has set up to prevent another monetary clog will not work. It’s the equivalent of them setting up a pipe where there is no sewage. So what is the point? Even the Fed itself does not understand the plumbing system that it is in. We have an article here from November 21st, U.S. funding cost surge in anticipation of year and pressures. It says here, the rate on overnight general collateral repurchase agreements for a year end or a loans collateralized by treasuries.

Basically, if you have a bunch of treasuries, you don’t have a lot of cash, and you want to give your treasuries to somebody that has a lot of cash, that’s a repo. And those backed by mortgage backed securities are soaring. So the rate for these repos are already soaring. The spike has come on Wall Street preparing for even more volatility as year end regulatory burdens drive some of the large disciplines, the sidelines of the repo market. So here’s our quote. This is the first time in years when worries about the turn of the year have started to get priced in so early, said Jan Nevruzi, a U.S.

rate strategist at TD Securities, trading an overnight repo for the December 21st, the January 2nd period, that’s the year end turn where repo markets get extremely tight, traded as high as 5.6% last week. That’s 100 basis points above the Fed’s upper target range of, I think what is it now, 4.6, 4. something? Since we’re treated to 5.45%, that’s still nearly 100 basis points above the upper target range. What is the deal here? The deal is this. In this paragraph is the key. Furthermore, it looks like the funding markets won’t be able to rely on a key Fed backstop, the standing repo facility or SRF to support it through the end of the year.

SRFs provide eligible banks and primary dealers repo financing at rates set by the Fed to keep funding market rates from moving outside of the central bank’s target range. So basically, the Fed provides dollars and repo when other parties cannot provide it because they don’t have any cash. The Fed comes in and provides it. But there’s a problem here. But the facility’s relatively low use and inability to maintain rates at the end of September revealed its limitations. What’s that talking about? It’s talking about the fact that in September, on September 30th through October 2nd, that is the quarter end, the repo rates went above the Fed’s upper target range.

And I think they hit like 5.5% when the upper target was 5.4% or something like that. Even though the SRF was triggered, the standing repo facility was triggered, it was not enough to lower rates back down to within the target range. Why is that? It’s because of this. The program targets only a part of the broader repo market, Roberto Perli, manager of the system open market account at the New York Fed, pointed out last week that SRF operates an uncleared client to dealer tri-party transactions, one of three segments in the space.

Now you can say to me, Ravi, what the hell are you talking about? And the answer is, I don’t really know. But I could just read numbers based on labels that I read in Bloomberg. I don’t know what exactly this stuff is or how it works exactly. But I can tell you what the numbers are. So here are the numbers. And I will share them with you right now. This is from the New York Fed website. It was talking about the tri-party collateral rate. This is part of the repo market. This is part of the volume that goes on in cash versus collateral versus treasury, collateral transactions every night.

This is not the whole thing. This is the tri-party part of it. This is what the standing repo facility from the Fed actually covers. So it says here, the tri-party general collateral rate. The TGCR is measure of rates on overnight, specific counterparty, tri-party, general collateral, purchase, and blah, blah, blah, blah, blah. Who cares what it says? This is the point, is that the volume in this tri-party, this is what the repo, the standing repo facility from the Fed itself, this is what it covers, $773 billion. You can see going down on the table here, the total volume is in the upper $700 billion.

It doesn’t really change that much. It’s been in the upper $700 billion for several months. The entire repo market, the volume is the SOFR. And the volume over here you can see in this column is $2.188 trillion, $2.291 trillion. So what’s $700 billion? Over $2.2 trillion, it’s about 33%. So what does the standing repo facility cover? It covers about 33% of the repo market, which is why, when the standing repo facility was triggered on September 30th, it did not lower rates back into the Fed’s target range because it only covers about a third of the repo market.

The Fed does not have a facility that covers most of the repo market. Two thirds of it doesn’t have a facility that deals with that. So that means when the next plumbing problem hits, it’s going to destroy the repo market and the Fed is going to have to print trillions of dollars in order to narrow the spreads or whatever is going to happen. And it’s going to cause a panic. And they don’t have the systems up and ready to deal with it. The standing repo facility is useless. They have not created a system that is willing and able to deal with the entire repo market.

And they’re not going to until the crisis is triggered. And when the crisis is triggered, you’re going to have a whole bunch of mayhem on Wall Street. And then they’re going to print trillions of dollars. And then gold and silver are going to go vertical. And then the dollar is going to die a few months later. That’s my thesis. I’m sticking to it. In the meantime, what you want to do is sign up to the endgame investor on Substack, link in the description below, where you will get an article where I talk about this stuff.

And the free portion of the article is where I talk about this stuff. So you can get a feel for how I cover these things. And if you want to support this channel even further, that you can buy a dirty man’s safe with the code endgame10 at checkout for 10% off. You can take some of your real money and bury it somewhere on your property and cover it with actually carbon fiber cloth. Which I am told does repel metal detectors. This is Raffi the endgame investor. And I’ll see you guys on Friday for this week’s silver report.

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