So Janet Yellen just had an interview With CNN and she finally admits the Obvious that the sanctions have Backfired and I think we kind of knew This for months now but it's really Telling that the head of the U.S Treasury can no longer hide the truth And let's travel back to early 2022 when Yellen told the world the aim of the Russian sanctions not the sanctions were Engineered to devastate the Russian Economy the plan was simple cut away Putin's revenues to end the war but Here's the key part the objective was to Maximize pain for Russia without hurting The United States but fast forward a Year later things didn't pan out According to her master plan and we know The Russian economy is still chugging Along but things have backfired we are Seeing a dead dollarization spree like Never before the dollar is facing a Crisis of confidence especially from the Global South and Janet Yellen can't deny This any longer the sanctions against Russia have hurt the dollars to Germany And unleash an insane backlash like Never before and and according to Yellen There is a risk when we use Financial Sanctions that are linked to the role of The dollar that over time it could Undermine the hegemony of the dollar and She goes on to say it is a very Effective tool of course it does create
A desire on the part of China of Russia Of Iran to find an alternative so Yellen Is now suddenly aware of countries Moving to the dollar rise but you should Have seen this coming a mile away now The world doesn't like it when there's a Sort of democrits hanging over their Head if you don't comply there goes a US Dollars or U.S bonds which country won Such a deal when the treasuries aren't Even yielding a real rate of return and It's really important that we go through Yale's predictions because they all turn Out the exact opposite she says one Thing and something else happens a year Later she's becoming like Jim Cramer a Contrary indicator that seems to get Predictions wrong in fact her track Record is so bad it makes sense to bet Against her and remember that this is The same person who said that inflation Was transitory back into 21 and that Admitted she was wrong nine months later So either Yellen is truly clueless or She can't tell the truth because it will Improve the markets and crash the Economy so let's assume Janet Yellen is Really smart and she actually knows the Consequence of weaponizing the dollar Right she's still trying to downplay the Severity of the dollarization and listen To this we haven't seen any other Country that has this institutional Infrastructures that will enable its
Currency to serve a world like this and She's referring to the Deep Capital Markets and the Swift system the United States obviously has now that is true But things are really backfiring badly And there's no stopping this train we Have a whole laundry list of countries All ready to dump the dollar and they're Actively looking for Alternatives and Here's the crazy part they don't need to Look far they just need to buy gold not The demand for gold in 2022 was insane And it's not just because of inflation But central banks buying the most goals Since 1950 they stack over 11 hundred Tons of gold which is an incredible 152 Percent increase from the year before They are buying gold because it is the Most convenient asset to the dollar rise It removes counterparty risk and you Remain neutral but that's only one part Of the equation we have multiple Countries looking to trade outside of The dollar Brazil is calling for the Brics Nations to the dollar rise by Creating a new currency and most Recently Blanca Dash they did something Incredible they are using the Chinese Yuan to settle payment for Russian Nuclear power plant and let me repeat This Russia is accepting the Chinese Yuan for international trade with other Countries but it gets worse China just Made an announcement that flew under
Everyone's radar they are starting to Allow the Chinese Yuan to float now China central bank has come out to say That they are ending their currency Intervention and this is big news listen To this next part very carefully by the Bank's Governor interest rate is the key And exchange rate is determined by the Market that is the basic message I want To get across China is pursuing a Balanced current account rather than Running a surplus and this tells us that The Chinese are getting ready to Internationalize the Yuan even more they Are starting to remove restrictions on Currency exchange that will allow more Countries to access the Yuan and by Pursuing a balanced account it tells us That China wants to consume more and Allow the Yuan to appreciate and this Isn't good news for the US dollar we are Seeing an environment that is turning Bearish against the dollar countries are Doing more bilateral trades they are Buying more gold and the global South is Trying to detolorize at any cost and This is what general Yellen is trying to Downplay the real impact of the Dollarization is actually bigger than Anticipated and in a headline by Bloomberg the dollarization is happening At a stunning Pace according to the Former Morgan Stanley currency Guru the Dollar's Reserve status has fallen from
73 in 2001 to 58 today and that's a 17 Drop but according to Jen the real drop In market share is worse the dollar has Dropped by 19 in real terms while the Yen and the Yuan are the big Winners With a three percent gain in market Share but that's just the US dollar Yellen has also made both claims about The economy telling us hey don't worry a Soft Landing is coming maybe the Multiverse but not in this current Reality according to yellen's Martian Economics a soft Landing is possible and Here's the really bizarre part she Believes is thanks to a banking meltdown And apparently Yellen has somehow seen The future and the banking crisis was Somehow lower inflation without sparking A recession so we probably know what's Happening with this backing crisis right Because of the SUV debacle banks are now Terrified to land they have to hold on To more cash at Titan Landing standards Because a bank run is always around the Corner Banks won't be so keen on lending Money today and this is what Janet Yellen is betting on that does tend to Lead to somewhat greater restriction and Credit which could be a substitute for Further interest rate hikes that Federal Reserve needs to make and she believes That a minor credit crunch can replace Additional rate hikes from the FED Without crashing the economy yes it
Could happen but this is a dangerous bet It's like spinning the roulette wheel And betting it all on one number she is Praying for Christmas miracle but the Situation on the ground is grim and Yelling isn't connected to reality the Deposit flight in U.S banks is still Continuing and we have seen many times Before that the Carnage isn't over just Yet we now have a whole slew of banks Losing deposits as customers are taking Their monies and fleeing to money market Funds ciao Schwab is leading a list of Mid-sized Bank runs with their deposits Down by 11 to 325 billion with their Stock price down 30 from a year back as Well now what we are seeing is that Banking meltdown continuing and it's not Just child Schwab it's happening across The board with the Regionals being hit The worst deposits are falling in every Regional Bank anywhere from three to Eleven percent and you can't blame the Deposit visitors the Federal Reserve Their setup a perverse incentive that Has tracked the banks in long-dated Treasuries while pushing depositors to Short-term bonds and you really have to Think about it why should depositors Stay in low yielding accounts where they Can take their money out and gain nearly Five percent yield in Money Market funds And this is the reality that Janet Yellen is discounting the big issue is
How unprepared the banks are for this Inflation crisis and how the FED stress Test was useless and let's understand How much of a failure dose were the fact They are stuck fighting the last war Their minds are stuck in the 08 crash And according to the Senate Banking Committee in the stress test the FED Thought the problem will be falling GDP Defaults or commercial real estate loans A spike in unemployment but because of All that money printing we still have a Zombie economy that is still limping Along the things that the fat thought Would be a problem are good now and the Thing they did not to be important the Risk of a big rise in interest rates is Causing failures in the fine initial System everyone thought that interest Rates will always remain at zero they Never imagined that rates could actually Rise and guess what rates are going to Stay high because Janet Yellen is wrong Yet again when it comes to the energy Markets and this brings us to the Sanctions on Russian oil now Yemen is Very part of the G7 price kept on Russian oil she mentioned how the 60 Price cap is studying moscow's expected Budget surpluses into deficits but let's Dig into the truth of that and according To the iea yes Russian oil revenues are Down 43 from a year earlier but it's Putting down for the count and the key
Is to see if the Russian war chess is Getting depleted and according to CNN Themselves Russia's OLX sports are back To pre-war levels so the oil volume is Not a problem it's just the price but The G7 knows that the price caps aren't Really working Beyond a certain point You can't control the entire oil Market There will always be buyers of Russian Oil that's why they are keeping the Price kept at 6 60 dollars and not Lowering it any further because there Really isn't any point and in a shocking Update India and China they're now Buying Russian oil above the price cap And this means Putin's all revenues are Starting to normalize up and the Fighting isn't going to stop the Sanctions have only accomplished one Thing and that is driving Saudi Arabia And OPEC closer to Russia OPEC plus is Now becoming more united in their oil Policy the Saudis and the Russians they Are now coordinating production Cuts Together to keep the price of oil higher To milk more revenues the production Side of the equation is stronger than The demand side we have the U.S Saudi Oil pack breaking down in real time as Russia grabs the upper hand and this is Going to boost inflation and recession Risk remember that the Federal Reserve Is trying to keep inflation down to two Percent but if OPEC keeps cutting
Production to push oil prices up Inflation will persist and we can see That if oil prices stay above 120 Dollars which is the yellow line we will See inflation hover at four percent till The end of 2024 and this is going to Complicate the fed's inflation fight let Me translate this the Federal Reserve is Going to hike more or keep interest Rates high at the very least we have the Federal Reserve now coming out telling The world that more rate hikes might be Coming inflation is just too high and we Have to realize that the FED cannot Ignore what OPEC is doing with the oil Price and this is the important part the Bulk of the fomc wants one more rate Increase to bring rates above five Percent but Barnard feels that interest Rates could go up above 5.5 percent so Just imagine the additional stress it's Going to power onto the economy interest Rates is the economy's weak spot and the Higher we go the higher the odds of Another banking collapse and this brings Us to the most startling admission from Janet Yellen which could just destroy The dollar even further and that is the Possibility of Russian Central Bank Assets being used to rebuild Ukraine now If you're waiting for knock cup blow to The dollar this is it and during the Interview when Zakaria asked her if you Agree that the money should come from
Russia's Frozen reserves and this is What she said this is something we are Discussing with our partners but there Are legal constraints of what we can do With the Frozen Russian assets and we Won't know if this will materialize or Not because they are still legal Obstacles and I'm doubtful that even the U.S treasury will want to cross that Line because not only will they lose any Negotiation leverage left over Russia This will most certainly freak out the Whole world and the first thing to react Will be gold you'll see incredible Central Bank buying in 2023-2024 if this Happens and it's going to keep the Global South especially China and Russia The ultimate excuse to Rally the world To the dollarize the war now China has Continued to cut their U.S Bond Holdings Reaching a 13-year low they now hold Less than 850 billion in treasuries Which is a warning signal to the world And what are they gonna do with all Those money chances are they'll continue To buy gold they'll cash out their Dollars and import more gold from the West and lock it up in their vaults and By now it should be obvious what China And the brics nations are doing with Gold they are likely prepping for gold Back currency to challenge the hegemony Of the dollar down the line and this is The fifth straight month of gold buying
From China even when prices are at an All-time high and this is a clear sign That they are likely planning something Big down the road because when you back A currency with gold you are attacking The true weakness of the dollar and any Fiat currency for that matter right Which is the loss of purchasing power so We have to watch this front because this Is the final frontier for the US dollar If Yellen decides to reach in and Transfer the frozen assets to Ukraine Then all hell will break loose in the Gold market we'll see a further erosion Of trust in the dollar and gold could Break new highs and that's why I feel Yelling as a powerful contributing Indicator when she sees everything is Fine and not to pay Panic that is when We know it's probably time to really Panic and this is the funny part she's Telling the world to chill and not to Overthink we shouldn't be too negative We are all negative nancies and we Should be more positive in state and This is where we move towards Fantasy Land according to Yellen the U.S economy Is obviously performing exceptionally Well so I'm not anticipating a Downton In the economy although of course that Remains a risk however if we listen to The Federal Reserve they are singing a Totally different tune Powell is Predicting a mild recession in 2023 and
When they say Mao is probably means a Horrific recession they are just Downplaying it to make sure we don't Freak out that we don't panic but here's A summary of the minutes given the Potential economic effects of the recent Banking sector development they are Projecting mild recession starting later This year with a recovery over the Subsequent two years the feds base case Is a recession in 2033 they will only Recover by late 2024 or 2025 live at the Earliest so someone is going to be wrong Here either the Federal Reserve they are Too bearish calling for gloom and doom Or Yellen she's in Teletubby land filled With optimism joy and laughter and That's why I can't take the economy Seriously anymore it's basically Cloud World every time I hear a statement from The fed or the treasury I either get Frustrated or really confused but Realize the storm is coming guys things Are not adding up in the economy and the Longer the Federal Reserve keeps Interest rates High the greater the Chance of a recession coming so let me Know what you think in the comments Below are we heading towards the Economic crash or is Janet Yellen right And everything is really okay let me Know in the comments below stay safe be Sure to smash the like button and Subscribe as we navigate through these
Crazy times
