This One Chart Will Show When the End Game is Imminent | Rafi Farber
Summary
Transcript
This video is brought to you by Miles Franklin. Hey guys, Raffi here from The Endgame Investor and people often ask me, they say, Raffi, are you following anything specific to time when the endgame will finally happen? And usually my answer is no, but now I can say that my answer actually is yes. Yes! I don’t have an exact roadmap for what happens as we approach the endgame, but I do have a general pattern that I expect to play out. I do expect for there to be one last financial banking, some kind of crisis in the financial banking sector, whatever that may be, and then a huge demand for dollars, final plunge, derivative driven plunge in gold and silver.
That will be very, very quick. And then a reaction by the Federal Reserve to print about five, six, seven, $10 trillion in the plumbing and two consumers together. And from there we have an endgame. Now I never recommend anything and I certainly do not recommend for myself the try to time when the final plunging gold and silver will be because it will be very short-lived. It will be very panic inducing. It will make people very emotionally uncomfortable and unable to buy because they won’t know when the exact end will be. And you might not even be able to fulfill your orders if you try.
But what ultimately will probably cause the final financial crisis to take shape is something going on in the repo market, in the plumbing of the financial system. When there are no longer enough dollars to fund what goes on there every night, then there’s going to be some kind of bank failure followed by a huge demand for dollars to keep financial institutions solvent. And then the Fed is going to have to print. This has been my blueprint since 2020. In 2020, we saw this happen, but it wasn’t enough to trigger the endgame.
But the next one I believe will be more than enough. So this folks is that chart. This is the percentage of bank reserves taken up by repos. I’ll show you the bank reserves themselves in a second relative to the Fed’s balance sheet. And I’ll show you something really weird is going on that cannot be sustained for much longer. And I don’t know exactly what’s causing it, but I have a little inkling of an idea here. So we have here the percentage of reserves, bank reserves is the high powered money. Basically, banks deposits at the Federal Reserve.
And we also have overnight repos, the borrowing of cash collateralized by treasuries going on every night between banks. Here you have the beginning of this chart, this over here at the high point, where we have about 87% of reserves taken up by overnight repos. That top number, that high here is about 87%. This was the repocalypse. This was when the balance sheet of the Fed started expanding again a few months before the COVID lockdown prices, which was over here. And we’ve been heading higher and higher in this ratio since about 2020, late 2021, 2022, early 2022.
We bought it out at about 20% over here. We are now at 59.7%. I suspect it’s actually higher because we just finished the June tax day quarter end, which should bring repo volume up to a maximum. But that isn’t recorded because the SOFR tables published by the Fed are on a one day lag. We’ll find out tomorrow what the actual number is. And repos should be higher than they were last recorded at 1.9 trillion. It should be about probably 2.1 trillion now. So this actual number should be something close to like 61, 62%, something like that.
This chart here, which I could jig it on Fred, we have the Fed’s balance sheet in red, the total amount of assets on the Fed’s balance sheet. This should be pretty familiar with most of the people. Pore relating to that, we have the amount of reserves in the banking system, bank reserves, bank deposits held at the Federal Reserve. So we see here that these two charts pretty much go almost perfectly in tandem. In 2008, the balance sheet was increased and bank reserves increased proportionately. And you can see as the balance sheet increased and increased, you had QE2 over here in 2011, I think it was.
And bank reserves increased correspondingly right here. And then the balance sheet was steady and reserves started to drop off. And then you had QE3 reserves had higher as the balance sheet had higher. And then the balance sheet stopped expanding again after QE3 for several years, two and a half years, it looks like. And bankers are started to steadily fall. And with QT, quantitative tightening, the first round of quantitative tightening beginning in about 2018, you had a severe drop off in bank reserves until you got to here, which is the Repocalypse in September 2019.
And that is when this red line started to climb again. That was the Repocalypse and it was several months before the lockdown crisis, which was, of course, over here. And you had the huge QE and a huge increase in reserves and a little bit of drop off here. And it goes down and then basically it continues to correlate almost perfectly reserves and federal reserve balance sheet assets. And we have here the peak of the balance sheet and then a drop off in QT as it started and a severe drop off in bank reserves.
Over here, we had the regional banking crisis in March 2023 that was over here at the minimum here in three trillion. Then all of a sudden something very weird happens. You have the regional bank bailout over here, right? The increase in the balance sheet, this little blip as they bailed out the regional banks and they bought all their underwater treasuries. And you had here a rise in bank reserves. But now look at this. You have the continuation of QT over here. And this is weird. It continues down and down and down at the same trajectory, even a steeper trajectory than we had the initial round of QT before the regional bank bailout.
But bank reserves have inexplicably stayed, even drifted slightly higher. Now, how is this possible? This has never happened before and what is causing it? Now let’s go into an interactive chart that we can see this a little bit better. So here we have the regional bank bailout, right? And reserves are about 3.369 trillion. This is on the same scale now. So we have the federal reserve balance sheet at 8.7 trillion. That’s the number. And then bank reserves at 3.369 trillion. And as they head down and down and down, we’re now at 3.268 trillion, just slightly lower than we were when we were at here, when the bank, when the balance sheet was about a one and a half trillion dollars more than it is now.
So what is causing bank reserves to stay level where they are and how much longer can this last? Well, I believe it is something to do with private debt being taken out, maybe buy now, pay later schemes or just people just taking out debt because they have no other choice. And that debt is counted towards the money supply and is keeping bank reserves steady. But at some point, they’re going to start to fall. This cannot go on forever because the amount of debt that is required to keep reserves steady keeps increasing as interest rates stay high.
So let’s go back to this interactive chart. And I want to show you something. If we go to the end of this chart, the very end, we are at right now, 3.268 trillion dollars in reserves. That’s the red line. And we have about 7.231 trillion dollars in Fed balance sheet assets. So we’re going to go back to the time when we were at last at 7.231 trillion dollars or the closest we can get to that amount. And that is, let’s see, 7.242. That’s close enough. And the amount of reserves we had back then was 3.147 trillion dollars.
So we’re basically even right now, even though it seems that this is out of correlation, this is out of whack because the balance sheet has been falling, but reserves have been steady. Well, if we go back all the way to when the balance sheet was at these levels, like 7.242 trillion, so we’re 3.147 trillion versus now 3.268 trillion. That’s about a hundred billion dollar difference. So it’s not that much considering there’s a little bit of non-correlation here. But if you take these two data points, it really is still pretty much correlated, which tells me that reserves are going to start falling fast very soon.
And once they do, and we go back to this ratio of reserves taken up by repos, we’re going to hit 87% fairly soon. I’d say in the next few months, I don’t know exactly when. And so what I want to say is that though it looks like there has been a non-correlation between bank reserves and the Federal Reserve’s balance sheet, really we’re at even rates in accordance with what the balance sheet was the last time we were at this level. So pretty soon, bank reserves are going to fall. The ratio of bank reserves taken up by repos is going to rise.
We’re going to hit that 87% mark at some point soon that triggered the last apocalypse. And we’re going to be in the next and final financial crisis. I think it’s months away. I’m very aware that I’ve said that before, but I can only tell you what I actually believe, not what I’m pretending to think. And if you still have to get ready for this, then I recommend going two miles Franklin. Franklin, Franklin, Franklin, Franklin. I work at Suncoast video at the mall and I still live with my parents. Today’s specials are one 10th ounce platinum British Britannias while supplies last only $59 over melt per coin.
It’s over melt as opposed to over spot because these are less than an ounce coins. I actually got my first platinum coin today. I traded with somebody for silver. It’s at a 34 to one ratio silver to platinum. So I think I got a pretty good deal. You can also, if you want silver, the silver special this week is one kilo silver. It’s how Preziosi bars at $1 and 79 cents over spot, which is about as cheap as you can get it. Either call eight five five game and or email and game investor at miles, franklin.com and get your gold and silver and platinum.
If that is what you desire today, because once the next financial crisis hits, I don’t think you’re going to be able to fulfill your orders that easily and premiums. Of course, at that point, it will go way up and you won’t be able to save that much money by waiting for a crash in the spot price. This is Ralphie, the end game investor. If you enjoyed this video, then please sign up for the end game investor on Substack link in the description below. And you can become my patron on Patreon. We discuss the more spiritual issues inside of financial prepping and monetary issues using sources that are thousands of years old and providing some ancient wisdom to keep people calm in this insane planet.
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