We are we are watching in my opinion the the next stage of gambling the entire system the eventual for maintaining the existing Ponzi basically which is treasury purchases. There is no one worth a trillion every 2 months. Nobody has that kind of income. Even China with all its trade doesn't have the means. I think they topped out in total around a trillion and they sub a trillion today on all time accumulation of treasuries and there's a new trillion every 2 months. So where who's been the buyer?


Well, we also had the the French and the UK. I call them the slave nations that are tied to the post of the western hedgeimonyi. The only thing that's good for the collapse for America is that they won't be alone because they're going to drag down the entire western world that is bought into the same Ponzi. I have my suspicions. As much as I don't wish any ill on uh America, I have my uh suspicion surrounding people that comment about robust a great auction for treasuries again today. You


get a lot of this all these people talking about, you know, the dollars under threat. Look how well demanded the treasuries have been uh etc etc. And there's uh there's been recent revelations, but it's worth also putting why these recent revelations have come out. There was an event in April that was very specific to the gold market and I'll tie all this back to gold because I don't want people to think that we're just going on a journey in the wilderness here. This is a gold story in


the end and a silver story very very strongly. So in April at what we called and named peak Trump tariff tantrum which was when you the very first time he was getting super aggressive and levied um tripledigit type tariffs across the broad spectrum of nations. uh but you know the ones on China being probably the most significant due to the trade relationship that is held there uh we ended up getting an event that saw treasuries spike down in value rates spike disproportionately up and I will show you that event on the charts when


we refer to the technical section in the second half of our chat but uh I want to put that landmark for everyone to remember and of course what also happened which brings us back to gold and I will be tying once I've taken you for a little bit of a walk in in the wilderness. I'll be tying this all back. Gold ran, having done our target of 2,900 and 3,000 that we had suggested when we were down at 2,000 on your channel. Gold had a surge from the 2900, smashed right up to 3,500 and that was its peak. And then we got


put into an April till September continuation pattern that recently broke out and led to the 3,350 runs right the way through for another $1,000 to the the high end of 4,350s and since then we're having our pullback. But going back to that April moment that was super super violent, what was really behind that? We called it Pete Trump tariff tantrum. And the great irony about that is Donald Trump came out and said uh without being prompted, I don't know how this came out, but ended up saying uh we weren't


worried about the bond market. Now what's happened since then is the bank of international settlements which for those that aren't familiar is a Swissbased central bank to all central banks highlighted that there is a crowding out and real systemic risk brought about by a very crowded trade a very highly leveraged crowded trade and that trade is what's known as the basis trade. Uh so a topline everyday man's explanation of the basis trade without losing ourselves too much in Finn speak


uh and gobbledegook jargon is basically the following. Leveraged hedge funds by treasuries. They do so with great leverage. So they're typically putting 1% and 2% uh maximum down. They are being levered up essentially 100x and are holding this. They are then pledging it as collateral and then they are securing further leverage. They are shorting the futures markets which typically trade higher than futures are basically particularly on bonds. It's just fiat but it's fiat with a delayed


delivery. So it's all about fiat. Even debt markets aren't really debt markets. They're fiat markets. We say we merge the two back together. They Siamese twins with one and the same. But uh it's just delayed delivery fiat uh a bond. That's all it is with a with a with a with a maintenance cost. So in essence they are shorting futures on the basis by the time the expiry comes the futures typically come back down and meet spot on delivery day. There's no point in buying a more expensive future for


delivery the same day if you can buy a spot cheaper. So invariably they come down. So they're shorting the higher line that comes down and buying the undervalued assets. Many will say, well, technically they hedged because they're long the same uh assets that they are short. The problem comes in is most markets have what's called contango. That means the future delivery costs more than the present ownership. There's in in things like gold and oil. Obviously, there's storage costs. When


you're talking about paper money that is all digitized, it's more about uh opportunity cost and also interest rate cost and maybe a little bit of inflation that creeps in there uh as well being priced in. So they are getting a very meager return. It's not a great trade particularly. It's a very meager return. How do you maximize a meager return? You apply a huge amount of leverage on it. But there's also costs. And in the financial running of this basis trade system, they are pledging the


collateral. They're even letting go of ownership for it for a while and financing with the repo markets, which brings in the intricate plumbing. Repo markets are the interbank lending where excess deposits can be lent to other banks at a low uh low liquidity levels overnight just to shore up uh a short-term cash knee. So you have all of this interbank plumbing that typically doesn't affect you and me in the streets. Of course, it also extends into money markets. Now, as a just an aside,


not specific to the basis trade, Warren Buffett is getting a lot of attention for having one of the biggest holdings in the money markets. I think he has uh in excess of 300 billion in the money markets where he's earning around four possibly a bit more percent on that on an ongoing basis because he's unhappy with equity valuations. So he is providing liquid liquidity technically via the money markets for interbank lending um his bank and make up those excess deposits available to other banks


that might be short and all of this is a funding mechanism for aggressively levered through the primary dealers who are facilitating the hedge funds for putting this trade on. And um I I compare this to subprime. The only differences is subprime you and I as man in the street got to see. We saw we had a friend at the dinner table who had 10 apartments but didn't you know didn't have the money for one he just put a good faith deposit a very meanial one down. Some had even got 100% finance or


even beyond uh 100% finance. We could see there was something odd going on is all inside the bowels of institutional banking primary dealers repo markets money markets that most people don't understand. uh and there is excess leverage building up there that's likely to cause a repo crisis or a money market crisis and this is so systemic the point of this that brought this out about what's going on in the the treasuries are truly held by the Cayman Island and saw that an already big whale in


treasuries was understated by 20 was only 25% of the position they truly had um the true value >> so here you possess a minuscule Caribbean Isle. You're referring to a speck of land mass that holds 71 billion as of 2023 in GDP. Now, let's just assume 7.1 billion GDP is comparable to a man's yearly income. Uh if you earn 250,000 annually, Elijah, you would have according to that if you were the Cayman Islands, then your 250,000 would correspond to 7.13 billion. They possess 1.88 88 trillion in head uh in United


States Treasury exposure. That would equate to you with your quarter million yearly gross wage maintaining a 68 million bond portfolio. Now, I believe you'd be thinking that if you were on such earnings, you might have some gold, you might have a bit of silver. It would be quite improbable that you'd be deep into seven digits on anything earning a quarter million. You've got a mortgage to cover. You have numerous expenditures, etc. on a quarter of a million. But a 68 million bond portfolio


is utterly implausible with that sort of income. That is the extent to which the Cayman Islands has evolved into this bottomless abyss purchaser of what I classify as panomics, which is 1 trillion every 2 months. We have merely transitioned into 38. We did. It was 2 months ago we surpassed 37 and it's intensifying. We shall be at 40 trillion before the year concludes. It begins with a four. And who are these massive buyers? They're being bankrolled through repos, nightly repo financing, and the


money market mechanism. And it's a congested trade, and all that's required is for futures to shift into backwardation rather than contango. Uh they're so overleveraged and they deem it such a certainty and they've all been leaping into the sector and acquiring these yields. You just need the future to diverge away uh from the spot markets and they will not have the collateral to sustain it. It turns systemic excessively vast to collapse. The Federal Reserve must intervene. It mirrors a long-term capital markets


equivalent as well because they endanger the entire framework and hence you initiate the subsequent two uh rescues. uh for it's not even for individuals the collective burden upon the remainder of us immense profits for those who will benefit from this absurdity yet how do we shield ourselves is gold the juncture at which we encountered this incident in April it's valuable to demonstrate uh what gold accomplished when all of this experienced its tremor that has led to all these recent exposures we are now uh


addressing it was this duration here that witnessed this enormous escalation It doesn't appear enormous now given subsequent events, but we experienced a surge from the 29 to 35, $600 on 2,900. Uh, that was literally a 20% leap, and they promptly entered a miniature concealed crisis. Many individuals weren't even aware much was occurring. Yet, Trump did make that notably revealing remark. Did you harbor worries about the bond markets? It's also worthwhile showing what the benchmark US


tenure did upon which mortgage financing so depends Elijah and uh that was this interval. You should observe it instantly spike. Um this was dollar gold at 2,900. Bang gold at 3,500. And although there's been discourse of reductions and everything is downturn and mild, which it is in my opinion, you've yet to reach the pre-basis trade tremor troughs. We've been in a prolonged, sluggish recovery with dreadful data on employment. We've had some shocking non-far numbers. We didn't


obtain one due to closure last month, but prior to that, we had two successive, very, very severe blows. You've had Trump exerting pressure upon all of that. You've not yet returned to the rate level on 10-year treasuries that you were at here, just preceding the basis trade tremor. So this merely exhibits the sensitivity and to finalize this I wish to display as well the Dixie and then I'll revert to you because this has been an extended um narrative that I've released upon you but that which


was was what occurred to the dollar index during that identical time frame the most intense part of the correction. It had already initiated in March somewhat. You could observe it as soon as we reached April. That was a very, very violent sell-off. Dollar declined, treasuries declined, yield spiked, gold, and this is a gold account. I mentioned I'd circle back. 2,900. Zip. Instantly, 3,500. I am casting an amber warning, saying, "Your forthcoming major financial catastrophe may possess this motif based


upon what my examination has revealed to me." And I'm not solitary. Uh, by the way, uh, there are others you may follow who have, uh, identified this, and I did obtain, uh, some X. Uh, which profile was it? There it is. Uh, there's a gentleman here who's likewise been reporting on it. I deem it worthwhile. Uh, he's been disseminating it, and I've been perusing his insights at top our Substack analyses, and he's precisely correct. And the intriguing element is this. This is an exceptionally helpful


uh formula. I admire how he encapsulated this. The United States government expending 2 trillion more than it acquires. Yes. Yes. Yes. Wait a moment. Where's the one I'm seeking? Um this is the essential matter. The greater the bond issuance. Let me just enclose this in the pink box here so that it stands out for everyone. The greater the bonds released, the greater the leveraged acquisitions required through the basis trade. the higher the necessity for repo loans because they lack the funds to


purchase the bonds. They're such immense quantities. They are hyperinflated. They ought to be trading considerably lower with significantly higher interest rates. The bubble and the manipulated marketplace are the debt markets, nothing else. And debt fiat is the bedrock. Everyone wishes to converse about stock exchanges and everything else. Those all rest like layers upon the foundation. The debt fiat structure is the foundation. The more bonds issued, the more leveraged purchasing, the more necessity for repo loans. Uh


upward strain on short-term repo yields that renders it extremely difficult for rates to descend much further because you've got this liquidity vacuum being imposed upon the repo markets and that cultivates systemic vulnerability. this this segment of this tweet as well um that uh the man uh Jeffrey did record underscores that and I appreciate some of the wording. I'm merely switching spectacles for the reading of it. Um this is the BS. The governmental bond markets at its core and asset managers


of diverse types as essential intermediaries. Consequently, the primary risk today is liquidity strain within governmental bond markets. Hedge funds notably become pivotal suppliers of pro-yical liquidity in sovereign bond markets, frequently utilizing high lever relative value trading tactics by employing governmental securities as collateral in the repo arena to borrow further. So haircuts have dropped to zero. Haircuts are when you require a type of deposit. You take something, they've declined to zero and even below.


Thus, you can actually pledge collateral and obtain increased borrowing in return. Now, we retreat and position the principal assertion. This isn't merely an account concerning one unsuccessful auction or a singular repricing episode. It's a narrative about the interplay of fiscal magnitude, market architecture, and financing approaches. When sovereign issuance surpasses thresholds that cannot be absorbed by traditional fully capitalized purchasers, the marketplace adapts through leverage and repo


facilitation. That adjustment supports issuance in the brief term, but constructs a fragile structure. The greater the reliance on short-term funding and confined pools of collateralized investors, the greater the likelihood that a disturbance, policy related, political or technical. This carries repercussions for asset distribution. Firstly, liquidity is now a paramount risk. Investors should stress test holdings for settings where financing ceases and where customarily fluid cash treasuries temporarily


broaden spreads or become functionally scarce. Secondly, counterparty risk is significant. The institutions that mediate leverage, primary dealers, large custodial chains, and shadow banking pipelines are the hubs through which systemic stress intensifies. Thirdly, for enduring capital conservation, allocation to tangible, deliverable, valuable metals offers a non-correlated equilibrium to liabilities founded upon fiat and repo mechanics. Critically, we should also acknowledge a bifurcated reality in markets. Price motion in


liquid paper, ETFs, futures, and heavily traded treasuries may diverge from the physical sphere for hours, days, or even weeks when liquidity circumstances worsen. Those discrepancies aren't mere technical anomalies. They're the very fissurers that expose where compelled sellers will act first. For disciplined investors, this signifies preparing for swift tactical possibilities to augment exposure to physical bullion during episodes of paper market frailty while sustaining liquidity cushions and


explicit execution strategies so that acquisitions are executed at prudent operationally sound instances. Finally, a cautious note on governance. Central banks and official organizations increasingly hover between moral hazard and market steadiness. Hunt's premise indicates that the policy backs stops we have depended upon in previous cycles might be less straightforward or more expensive the next time they are applied. That substantiates the argument for tangible assets as an insurance mechanism, not a speculative gamble, but


a deliberate allocation aimed at maintaining purchasing strength when fiat anchors are challenged. If you valued this evaluation and desire more content akin to this, subscribe and hit the notification bell so you don't overlook any of our forthcoming releases. Leave a remark with the single statistic you'll be observing first. Repo rates, treasury ownership density, or the paper to physical disparities in gold. Thanks for viewing and we'll meet in the next one. >> Don't forget to like our video and


subscribe for our channel.