Folks, Central banks around the world are on the edge of a massive cliff and the FED here in the U.S is operating at a deficit never seen before. U.S Consumer confidence is falling to a new low and the bear Market rally attempt continues in this video. I'm going to violently break down each of these major line items and you are going to be aware of everything it is that you need to be aware of. And before we get into it, one of the easiest ways to build your portfolio in this tough Market condition is by building it with free stocks and luckily we have just the promotion for you.

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Certainly, the Bank of England and others look at this chart hither in blue. You have the Feds treasury Holdings which skyrocketed during the pandemic, and in early 2021 as the FED bought treasuries to stabilize markets by injecting insane liquidity. Similar trajectory on a much smaller scale in England since obviously the UK is a much smaller economy, and then in the European, the ECB you also have a massive increase in bonds. But guess what's happening to bond prices? Well, you could see the price of bonds declining at a rapid pace.

which means all of these bonds that the central banks bought in 2020 and 2021 at much higher values are now being offloaded at much lower values. The FED is following the famous 2022 investing strategy of buying high and selling low at the same time. The rate hikes also mean that the FED has to pay top dollar in interest payments to the record amounts of capital that institutions are parking overnight with them. Don't you worry though, Because of course, the FED can't technically go bankrupt because of its relationship with the government.

Of course, you're not supposed to say it's a part of the government, but sometimes the lines get pretty damn blurred when it comes down to who picks up the check. Look at this hither. This is a chart that shows the deepening hole the FED is digging itself into. a situation that analysts are saying may very well ultimately require treasury action.

AKA Sly Taxpayer-funded intervention. This shows Fed earnings remittances due to the U.S treasury. They are operating now at a deficit, which is very, very rare historically and this will need to be paid back in the future. Or the treasury may have to take the L themselves by reselling the debt owed to them by the FED.

But that's a whole other. Rabbit Hole So let's back up for a second, because I might have lost you here. What is the relationship between the Fed and the treasury? In this sense? Well, you see, the FED is mandated to send back its interest income on its massive Bond portfolio back to the public via the treasury. In normal times, the FED operates profitably and sends that interest income it earns on its Bond portfolio back to the U.S treasury successfully, which then goes on to be a line item in government revenue and goes on to pay for things like Social Security and other government expenses.

However, because the FED is increasing rates so fast, it's creating this problem where the FED no longer has the operating income to pay out these remittances even though it's required to, and thus it's starting to rack up a deficit which has to be paid back once the FED starts getting a net positive income. Again, here are the three problems that is killing the Fed's ability to pay out. Number one. Obviously, again, the Fed's bond Holdings are getting devalued fast, meaning they have to offload them at massive losses.

Number two: the interest income on the remaining Bond Holdings is from the prior era where they injected capital in return for very very low interest rates, meaning the FED isn't actually making much income on them in comparison to the new rates. If you look at this chart hither it shows. Start here shows the yield that the FED is making on its portfolio very very low. And the third problem like I mentioned earlier is the Fed also now has to pay out the new hire rates to the many banks and institutions that are parking their money with them.

This is all leading North Central Bank to spend more money than they make and this is An Occurrence that is happening all around the world and this is certainly a hit to the taxpayer. The U.S treasury will see a stunning swing going from receiving about 100 billion last year from the FED to a potential annual loss rate of 80 billion by year end according to Amherst Pierpont Securities LLC which is where the taxpayer comes in to make up the deficit. Without this income from the Fed, the treasury. May then need to sell more debt to the public to fund the deficit in government spending, which means wider deficits in future quarters.

And yes, the central bank will obviously have the ability to pay back these when they reverse the policies because that's how the system works. But that doesn't mean there isn't a opportunity, cost, or taxpayer liability that is fronting the bill. In the short term for them. And we're seeing a lot of examples right now about how other central banks that work very similar to R cars have been quite frankly destroying the taxpayer.

The United Kingdom's treasury just transferred 11 billion dollars to the bank of England to cover the QE losses they had. This payment was the first evidence of taxpayer hits from Bond buying quote. The Boe bought 895 billion pounds of government and corporate bonds between 2009 and 2021 to provide economic support after interest rates were cut as low as they could go. The recent fall in bond prices after interest rates shot up has left the remaining the 838 billion dollar portfolio of guilt carrying a market loss of about 200 billion dollars.

As the Boe's purchases are indemnified by the treasury, any losses will be borne by the taxpayer. So at the end of the day, the structural issues with the central banks of a country tend to fall back on the taxpayer. And this again is where I say the lines between central bank and taxpayer money often get very, very blurred when pushed come to shove. Not only are policy wrongdoings destroying you in the economy, economy, and in your Investment Portfolio but also in terms of the public money that you pay into.

Okay, next Consumer confidence. So consumer confidence is continuing to drop ahead of what usually would otherwise be a very busy holiday spending season. This is a terrible time for consumer confidence to drop because it means holiday sales will be light, right and a lot of companies Bank on that literally all year. But the latest report showed a downtrend in the last two months of attempted reversals.

Upwards, You go back to 0809, right? You're all the way down here. and it took roughly seven years to get to where we were at at pandemic lows and then from pandemic lows. It took another three to four years to get where we were at at rebound. Peaks Yet after shutting down the economy and magically throwing tons of money into the system, who would have thunk it? we recovered the bludgeon in consumer confidence in under a year.

Very very. Rapido And now as we've been draining that Capital we've seen a steady decline. Who would have thunked that too if you had a little reversal as consumers saw some relief at the pump and expected lower inflation. But now that is changing and you go over the present situation and expectations index.

The trend downward in expectations has not been this sharp and consistent and long-winded since the 2000 to 2009 Trend downward. Only 17.5 percent of consumers said business conditions were good, and that's down from 20.7 percent in the prior month, which that wasn't too good either in terms of viewpoint on how labor market is doing, which is supposed to be the only positive Hallmark of this economy. Well, that's also trending down. 45.2 percent of consumers said jobs were plentiful, down from 49.2 percent in the prior month.

Another three or four months of this trend, and then all of a sudden you're no longer in a job market that people think that people think is plentiful. Quote: Consumer confidence retreated in October After advancing in August and September the present Situation Index fell sharply, suggesting economic growth slowed to start. Q4 Consumers expectations regarding the short-term Outlook remain dismal. The Expectations index is still lingering below a reading of 80 a level associated with recession suggesting recession risks appear to be rising.

You think? so. Consumers here are starting to more unanimously expect dismal outlooks, which means spending should be blunted heading into the holiday season. And we know this trend is very, very consistent with what we see with people's real income and how it's being eroded so fast. As Bloomberg reports quote, it's hard to really increase your consumption if your real income is heading lower, Households are instead having to rely on savings to help keep consumption where it is.

And of course we also know they're dependent on debt as well. And to add on to this, even when consumers are spending well, companies are taking massive L's Because of this macro environment, you look at Proctor and Gamble They are reporting massive losses due to specifically the impact of foreign exchange rates In Beauty Six percent losses Grooming eight percent Health Care Five Percent Fabric and Home Care Six percent baby feminine and Family Care five percent unfavorable Foreign exchange had a six percent impact on net sales. This is all due to a massively strong dollar. And listen to this.

PNG Said it's current Fiscal 2023 Outlook includes headwinds of approximately 1.3 billion dollars after tax due to unfavorable foreign exchange rates, 2.4 billion due to higher commodity and materials costs, and 200 million from higher freight costs. Combined, these items are a 3.9 billion dollar after tax headwind. PNG is dealing with a 3.9 billion dollar headwind because of Simply the macro environment that they are in. This is a massive massive bad macro attacks on some of the most powerful companies in the world.

So it's like hey, okay, you have to operate a business and then you have to spend billions of dollars to pay for dumb macro problems. Finally, Bear Market Rally So if you go back to Sunday the 16th, my prediction was we had a high probability of seeing the start of a Bear Market rally before the FED Fomc meeting that's going to be happening on November 2nd and so far we have gone That bear Market Rally, you're seeing pretty aggressive bouncing across each index. And the reason for my prediction in ways you have an earnings season where we know that companies are slowing down massively and getting eaten into, but they still have been reporting relative pricing power which is better than a lot of analysts had expected from that standpoint. although I think it's going to get much worse into Q1 and Q2 but this is a time period where analysts are like, oh, there's some pricing power left and then you also have a blackout period where the FED can't drop any more Bombshells of course.

Finally, as of late, you've had some new recirculation of the theories that the FED isn't going to be as hawkish. All of these things have set the stage for previous Bear Market rallies throughout this entire year, and it is setting the stage once again right now, But even on a technical level, each downtrend we've seen this year resulted in a breathing period where stocks attempted a reversal above our redirectional SMA line and then rejected it. This time around, you've had a downtrend that just hasn't been allowed to breathe sizeably, which means we are due for a rally back to the moving averages again, which then will get rejected. Now, if this particular Bear Market rally attempt fails and turns into something like we saw here in June, then you'll get an even bigger rally After that, back to the moving averages, it'll just be more delayed and I Don't think that you can time these Bear Market rallies perfectly, but when you get them, they are great in the sense that they often provide a lot of Juicy runs in squeezing Catalyst plays at the same time.

Bbby, for example, had a nice run today up over 20, Cgc up over 25, Ffie up over 26 percent, Rad up over 22. Obviously we had a nice Mullen run yesterday. might have some more later on in this week. You also had some nice Catalyst runs like Tisha tsha, Duo Rev, B Ptpi, and so on and so forth.

On the days where you get this aggressive overall Market Uptrend Well, it lifts a lot of the heavily shorted small cap stocks because short sellers? Well, yeah, they're right on the overall direction. but when all of a sudden a lot of capital flows back into the market, it ends up finding its way into these short squeeze stocks. And that Capital has a hugely lifting effect and multiplying effect on a small cap stock. And then you get all these speculators binding on top of it.

and then you get shorts, covering, and so on and so forth. It's really a fun time Anyways, that caps off today's video. Make sure to hit that ravishing like button and subscribe. Get your up to 15 free stocks with MooMoo if you want to join us in zip Trader you I'll put the link to that Below Have a good rest of your day and we will see you in the next video.