The $1 Trillion Aftershock From Debt Deal
The Re-Apocalypse That Could Happen Over The Next 30 Days
Mark Moss does his usual masterful job of explaining what’s happening behind the curtain
The $1 Trillion Aftershock From Debt Deal
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FULL VIDEO TRANSCRIPT
brace for the one trillion dollar
Aftershock from the debt deal now we’ve
been talking about the debt ceiling
debate for weeks and it looks like a
deal was finally made well not so much a
deal as a complete caving in from the
Republican side but that’s not the topic
at hand but rather the Aftershock that
comes from reaching the agreement and
lifting the debt ceiling and I’m not
talking about the long-term effects of
an additional four trillion dollars of
debt I’m talking about what Aftershock
and repocalypse that could happen over
the next 30 days as liquidity has sucked
from the system in only 30 days so in
this video we’re going to break down
what the new debt ceiling means for the
U.S treasury and their bank accounts the
TGA we’re going to look at how much debt
they will issue when refilling this TGA
account where the money and liquidity
gets sucked out from we’re going to look
at what happened in the previous times
this happened and it’s not good and then
we’ll look look at what effect this will
have on the markets and economy so we
don’t get blindsided like the majority
of people will but instead position
ourselves to profit so let’s go
all right welcome back if you’re new to
the channel my name is Mark Moss I make
these videos to change the way you think
about money because yes almost
everything the learner’s wrong almost
everything you hear is wrong and you
have to learn how to kind of dive in and
get through the opinions and the
narrative to understand the facts on
what’s really going on and so I make
these videos to help you navigate all of
that and let’s just jump in and take a
look at what’s really going on with the
debt ceiling now I’m not going to dig
into what the debt ceiling debate was
about and what the concessions were
there’s plenty of news articles you can
go read to do that what I want to show
you is what’s going to happen now
because of that and not in some long far
away you know what happens after four
trillion dollars of spending in decades
for our grandkids but what happens in
the next couple of months so we’re going
to take a look at that now first of all
just in regards to the debt ceiling I
will say what ceiling so literally the
debt ceiling agreement literally removes
the ceiling it was about you know
obviously reaching this agreement to
raise the ceiling which is current
currently at 31.4 trillion dollars of
debt that number is so big you can’t
even comprehend it and basically they
made a two-year deal to just suspend the
ceiling let’s just get rid of it and uh
as a matter of fact let’s push it out
past the next presidential election
cycle all the way till January of 2025
so Biden doesn’t even have to deal with
this again in his presidency or uh his
next run if he’s going to do that all
right so we have a two-year deal to
suspend that here’s the one thing though
because of the you know pandemic era
where we increase the monetary Supply by
about 40 percent and we increased the
budget from about 4 trillion to 6
trillion so we increased the budget from
four to six
and that is now normalized that’s just
now baked in so it wasn’t about cutting
us back to where we were pre-pandemic
it’s about keeping that growing and
again this isn’t temporary this is their
plan as I’ve been saying all over social
media by the way if you’re not following
me at one Mark moss on Twitter we’ll
link to that stuff down below as well I
put a lot of daily commentary out there
but I said you know there’s always been
two certainties in life death and taxes
and now there’s a third and that’s yes
money Printing and we can take a look at
you know this increase in the debt
ceiling this is only going back to 2005.
it’s not that far but you can just see
how fast this is of course right here
2020 it really took off uh really fast
and you can see here
by the way shout out to Joe consorti you
should follow him on Twitter as well
we’ll link to him down as well he’s
helps me with the research for these
videos it’s a lot of data charts so
shout out to him so I put this tweet out
that he put out here that per the CBO
Congressional budget office they’re
projecting that the debt to rise to a
hundred and thirty two percent in 10
years not to go down but to actually go
up and uh to 200 debt to GDP by 2053. so
that means they’re not planning on
paying off now you’ll see the debt did
get high back here in the 40s and then
they were able to bring it back down
they were able to do that through
something called Financial repression
I’ve done videos on that if you want me
to break that down again leave me a
comment just say Financial repression we
could do another video so they did bring
the debt to GDP back down here through
some games and tricks Financial
repression I think that’s the next game
plan but here they’re not even
projecting to do that here they’re
projecting to continue sending it higher
all right now let’s go back to the topic
at hand a tsunami of new t-bills so this
is what’s happening so
the government well our entire monetary
system is based off of debt so if they
need money they have to take on debt in
order to do that and so
in order to do that the government or
the treasury will have to issue treasury
bills t-bills so that’s debt and they’ll
receive the money back now we know that
right now this treasury debt is is
maturing between one month and one year
that’s that’s what they like to issue
short-term dated notes and this is
basically like I said the go-to funding
for the United States if they need money
they don’t have any Revenue I mean will
they have Revenue in taxes but they also
have to issue debt in order to do that
and so now it looks like they’re
scheduled or expected to issue one
trillion dollars in June
let me say it again one trillion dollars
in June that’s how much you have to do
and they’re going to be paying about
five and a quarter percent interest to
do that because that’s where the FED has
raised the rates to now assuming that’s
uh everybody buys what’s available now
if there are no buyers they’ll have to
keep raising the rates until there are
buyers so we can see how that goes and
then half of that money being raised is
just to pay the interest on the old debt
that’s what we call a Ponzi scheme the
other half will go to put into its cash
balance and this is the big piece this
is the TGA the cash balance you can see
actually I’m not going to pull up that
chart right now we’ll bring that chart
back up a little bit later
all right now the U.S government the
treasury has to borrow more as a matter
of fact about 500 billion as I said
about half goes to pay the debt half
goes to the US government’s bank account
so the US government has a bank account
it’s called the TGA and they’re going to
put that amount in one month or less in
there now what’s important to understand
about this is where does this money come
from and what does it
um and where would that money have
already gone or otherwise gone and so
this is now not being spent into the
markets so as the treasury the TGA
account was draining they had about 1.8
trillion in that account and now it’s
down to like 20 billion so it’s
basically empty as they were spending
that money it created massive liquidity
in the economy in the markets which
created things to be pretty good now
they need to refill it which means it
pulls the liquidity out so instead of
providing liquidity it sucks it out this
is a massive liquidity drain and that’s
the thing that we’re going to break down
right here okay now this is on Pace with
a post covid market crash and a December
2021 market crash so we can see this
right here so this is what I’m talking
about this is the treasury’s bank
account the TGA account now we can see
right here in 2020
when they filled it up now this was
about like I said almost two trillion
dollars right there since then they
drained it all the way back down
they filled it back up again right here
and then they’ve been bleeding it down
ever since now like I said this
corresponds with I have a couple other
charts I’m going to show you but if you
remember the high in the NASDAQ the high
in Bitcoin was remember November 2021
which is when this reached its bottom so
as they spent this money up the markets
went up as they started filling back up
the NASDAQ
coin they’ve been going down see how
that works I’ll show you a couple charts
to kind of really illustrate that and
basically what happens is the US is
spending less because they’re putting
money back into their account the TJ is
the US bank account or in this case the
piggy bank and so
the liquidity is not going into the
economy so when this is falling when the
TGA account is falling I just want you
to understand this works that means
liquidity is going into the economy so
that’s good people have money they spend
it when they’re filling when they’re
Rising the TG account then liquidity is
leaving the economy so it’s going into
their bank account and then what happens
is that starts to crowd out other
markets so instead of money that could
be going into other things going into
other Investments Venture Capital
private Equity stocks Etc instead of it
going there it goes into the TG it kind
of takes it away and what happens is
that we see risk taking fall they’d
rather give it to the treasury and make
the five and a quarter percent then take
risk from that so let’s take a look at
how this works so
we have to ask ourselves a question when
this is happening and the question is
not
who’s going to buy all the treasuries
the question is who’s going to buy
everything else so if the treasury
issues a trillion dollars that people
are going to buy well people are going
to buy that
but who’s gonna buy everything else and
that’s where the problem is that’s why
the TGA refill is bad for risk assets so
as a matter of fact we can look at this
chart right here again Joe consorty
helped me out with that we’ll link to
him down below you should definitely
give him a follow but here what we can
see is the TGA cash balance and risk
assets and what we did is we inverted
them so this uh this blue area right
here is the TGA the treasury’s bank
account you can see it Rising here I
already showed you a chart of that alone
and that what we have on top of this is
the S P 500 in blue these blue lines and
the NASDAQ in the orange lines and we’ve
inverted them so what you can see is as
the TGA account was draining the NASDAQ
and S P 500 went up as the TGA started
refilling the NASDAQ and the s p went
down remember in this chart we’ve
inverted them but we inverted them so
you can see how it’s almost exactly the
same so you don’t have to be really good
at this to understand if they start to
drain this I’m sorry refill it again
what do you think happens with the S P
500 or the NASDAQ
I’ll leave that for you to decide
actually I’ll come back and I’ll answer
that for you at the end of the video now
this is another chart right here Bank
Reserves and the S P 500 so as you can
see here this um
this uh red line or kind of pink line
here is the S P 500 these are the stocks
and so you can see the S P 500 has been
going up and then what we have here is
the Bank Reserves so as the Bank
Reserves went up the markets went up
but to refill the treasury they’re gonna
have to pull the money out of the bank
reserves to go into the treasury so
we’re going to see this go back down and
where do you think the pink line goes
well if you guessed down you would be
right okay now what we also have to
understand is this means more bank
failures so if we reduce the reserves
that’s bad for small Banks what caused
the banks to collapse people were
pulling money out and they didn’t have
the money to cover that if we pull more
money out to go to the treasury the
banks don’t have the money to cover that
same problem that we already had before
and this means that the Lesser
capitalized Banks
are going to have a problem because
they’re more dependent on reserves also
these small Banks a lot of them can’t
use these fed funding facilities have
been set up a lot of you guys have seen
that testimony uh where the senator from
Oklahoma was asking Janet Yellen this
specifically you know which banks what
about the local small banks in my state
and she says we’ll just choose which
ones so many of them can’t use the FED
facility that they have and so what
we’re seeing is the fed and the treasury
working together are going to cause more
small bank failures and this is a
problem because without the small Banks
we don’t have small business funding if
we don’t have small business funding we
don’t have a small business if we don’t
have a small business the economy
doesn’t do too well you can see that
this is a kind of a chart showing you
the difference of the small Banks versus
the large Bank Reserves and the large
Bank Reserves have been going up while
the small Banks reserves have been going
down and we would expect that problem to
only get worse now to refill the TGA the
treasuries account the general account
it’s basically the same as what the feds
doing with quantitative tightening
they’re both trying to tighten the
monetary standards so when money’s loose
when money’s sloshing around things do
really well when you tighten it back up
people tighten their belts as you might
imagine and so what has been projected
is to refill this TGA is equivalent to
an additional 25 basis point height so
we know the FED has been raising rates
at the fastest rate in history a lot of
people want to know will there be
another hike or are they going to pause
well
it’s looking like they’re probably going
to raise it one more time 25 but by
filling the TJ that’s like another 25
basis point on top of that the FED is
not actively buying the U.S treasuries
anymore so all of this is going to have
to be absorbed by the market remember
taking dollars that would otherwise be
going into stocks or businesses and now
it’ll be going to the treasury
now so the FED has been raising rates at
the fastest rate in history trying to
crush Demand right they’re trying to
bring asset prices down make you lose
your job make you broke so you can’t
afford to buy as much stuff you don’t
buy as much stuff then they can bring
inflation down that is their goal and
now it looks like the treasury is
getting on board that not necessarily
because they’re in lockstep but this is
just the way it is now they’re going the
fed’s tightening and the TGA is going to
have to be refilled at the same time now
how does that work at the same time how
can the TGA suck this liquidity out
while the feds are so sucking liquidity
out well that’s hey a double sucking of
liquidity and what could go wrong well
let’s just take a look we can see here
when the debt limits gets resolved so
we’re sort of there right now
you’re going to be very very deep and
sudden drain on liquidity of course
we’ve been already setting that up
that’s that’s such a drop in liquidity
liquidity really does negatively affect
risk markets again NASDAQ uh Bitcoin
cryptocurrencies things like that risk
on assets we’ve already had a deep and
sudden drain liquidity we’ve already had
that because the fed’s already been
tightening it’s already raised rates
from uh you know 0.25 to 5.25 and we’ve
already seen it stronger than anything
since the great depressions we’ve
already seen a sudden drain liquidity
worse than anything we’ve seen since the
Great Depression has already happened
and it’s been ongoing for the last seven
months so we’ve already been dealing
with this and it’s about to Crescendo
it’s about to reach a climax is what
they’re saying it is possible that
something breaks weeks after the debt
deal is closed because remember in the
next 30 days this is going to happen and
we could end up in a full fed pivot so
something could break so bad that it
could force the FED into a full-blown
pivot of course if you’ve been watching
my channel then you you know that it
looks like that will be coming later
this year so we’ll probably get through
the summer it could be September October
November somewhere in that time period
so this is all starting to line up now
if you’re not watching my videos you
should take a second and just hit that
subscribe button real quick so you don’t
miss any more videos when I put it out
there now this is not a prediction but a
caution to have what you need what do
you need you need cash you need dry
ground powder ready including enough
free cash to take advantage of these
deals so we don’t know if this is going
to happen but if the TJ refill starts a
fire
which it most likely could certainly
history shows it will understand the
mechanics of how the system works tells
us it will if that happens then the FED
will have to step in to put out the
Flames which is the pivot so everything
that we’ve been documenting since last
year I’ve been talking about how the FED
raising rates would put the government
broke which is what happened now they’re
borrowing more money now they’ve got to
refill the TJ they increase the debt
ceiling it’s all lining up for something
breaking and the eventual fed pivot now
this is not a prediction but this is
what looks like it’s happening this is
the most probable base case and so you
want to be ready at least I know I am
hopefully you are that’s why I make
these videos and again don’t miss them
subscribe to this channel if you’re not
already and of course let me know what
you think leave me a comment down below
thumbs up if you liked it if you didn’t
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down that’s okay but at least tell me
why in the comments and that’s what I
got all right to your success I’m out
foreign
thank you
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