Fed Panic Buying Begins as U.S Banks Brace for CRE Fallout

The Federal Reserve is loading up on treasuries, going on a buying spree of close to a quarter of a trillion just this year alone. But if you think that that's not a big deal, listen to this. Treasuries now account for 65.9% of the Fed's total assets, the highest level since March of 2008. And that's not the only time you're gonna hear about 2008 today, because commercial real estate, often penned as the next big short, is deteriorating rapidly. And it all ties together with the private credit meltdown, U.S. bank risk, and risk to everyone out there watching who holds dollars or dollar-denominated assets. So what exactly is going on, how does it impact you, and what can you do about it? Well, let's get into it. In case you missed it, the Federal Reserve is continuing to buy U.S. treasuries with their holdings now hitting 4.4 trillion, quickly moving from the lender of last resort to what seems to be the lender of first resort in a clear signal that the market as a whole, the system itself cannot function without more intervention. And we're going to talk about why and the impacts it's going to have on all other areas. But first, let's talk a little bit more about what the Fed is actually up to. Now, following 2020, they bought a ton of treasuries, right? We can see, I'm going to throw this chart up in 2020, 2021. Bye, bye, bye, bye, bye. Then they decided to tighten their balance sheet. End of last year, they had a reversal. Oh, you know, it's just liquidity management. They come up with all these simple terms to make sure everyone feels very calm and safe. But no, again, let's call a spade a spade. What it is, is increasing the balance sheet and buying treasuries back. And if we zoom out, if we look at a chart that's not just the last five years, you can see that this balance sheet is highly elevated from where it should be. But why are they doing this? Because it needs intervention. The market, the treasury market needs support. The buyers are not there the way they once were. And the warning run is only further escalating now. We have seen central banks moving away from US treasuries for a number of years. And that move has only been escalated as central banks move into a safe store of value with no counterparty risk, physical gold, rather than an IOU, a promise from a nation who's at risk of being downgraded by their credit once again, who can turn around and weaponize the dollar against you at a moment's notice. But if you think this is going to stay contained in the treasury market, think again. It's already spilling out into other areas, which I've talked about, because ultimately, you cannot attract more buyers by lowering rates. But if you keep rates elevated, what happens? Well, the system itself that has gotten so used to cheap and easy credit, suddenly it all starts to crack under the weight of its own debt, which is what we've seen happen in private credit. And now we're seeing in commercial real estate, which is something I have warned about before. You can't tell me that when you drive around town and you see all those empty office buildings, those malls, those businesses going out right and left, that you don't think someone's on the hook for that, that somehow this thing hasn't collapsed yet. How is that possible? Well, the banks have been playing extend and pretend, which means that essentially they've been changing the terms of their loans because they themselves can't afford a loss. We know that U.S. banks have a far weaker balance sheet than anyone would like to believe. They have massive unrealized losses. They simply cannot afford to let commercial real estate fail, but it might not be up to them anymore. This article from Zero Hedge says that commercial real estate, which for many years has been penned as the next big short, is deteriorating rapidly. In fact, March saw a surge commercial real estate delinquency rate, which jumped by 41 basis points to 7.55%, the highest in years. Okay, now that's not something to turn away from. That's very serious, okay? Because here's where it gets worse. We know that in private credit, there has been a massive wave of redemptions or essentially investors demanding their money back, their funds back, because they know that it's not contained. They know if there's one cockroach, there's more, right? And as we're seeing more of these private credit funds have issues, they are closing the exits. We're billionaires, which should concern you because if they can close the exits and change the rules on them, what hope does that leave for the rest of us? Well, as they've been closing these and as redemption waves have skyrocketed, in fact, I'm gonna throw up a chart here too that shows redemption requests along the industry in private credit. You can see that this is a trend that isn't slowing anytime soon. I mean, if you were heavily invested in private credit, if you had a lot of exposure to these funds, would you leave those funds in there? Would you feel safe and protected? No, there's no transparency. No one knows what's really going on. All we know is that the underlying assets aren't worth nearly what these private credit funds said they were. But back to commercial real estate. Well, now it seems that redemption waves that rock private credit are making a move into commercial real estate. So Starwood Capital Group Management, a high-profile management group, is halting redemptions from a $22 billion real estate fund. Okay, so it's not just private credit that's changing the rules. Now we have real estate funds changing the rules. Think about that. Think about that when you go and you say, I wanna withdraw, I wanna redeem, and they say, no, you can't, or you can only do up to X amount. That is what's happening. If it's happening to these wealthy investors or these big-wig private funds, what does that mean for you and I if our banks decided to change the rules on us, which we know is completely legal here in the United States? It's called a bank bail-in, not a bail-out, right? Instead of using taxpayer funds or made-up money that they print out of the air that ultimately reduces our purchasing power, instead they go, no, no, no, this time around, we're taking your deposits. We're freezing and seizing your account. Think about the terminology, the phrasing they're using here and how the exact same thing could be applied to your personal bank and your deposits. It says here, taking this step now, while it might be frustrating for some shareholders, taking this step now allows us to preserve the opportunity to realize better outcomes as market conditions approve. Imagine that your bank, tomorrow, you wake up, you have no time to prepare. You wake up tomorrow and your bank issues a statement saying no one can take out their deposits. The ATMs have been shut down. The banks are frozen. Sorry, there's a sign on the door, right? We're shutting everything down. We're gonna freeze for a couple of months your access to your funds, but don't worry, we're doing it because when things improve, it will be better for all of us. And then, of course, what happens in a couple of months when things don't improve? Well, sorry, we actually had to take your funds out of your account and they're ours now and we used them to make ourselves whole, even though we were the ones who gambled away all of your life savings with our risky bets. Sorry, you know that this topic makes me very worked up because ultimately it's always the everyday Americans, the everyday citizens in every single nation that this has happened to who end up paying the price for those at the top, the elite, for their decisions and they walk away with their pockets full. I don't know about you, but I personally would not wanna be in a position where I have no access to my funds. I mean, that's why, of course, if you don't hold it, you don't own it, right? That's why I'm a big, big believer in physical gold and silver. And if you don't already have your physical gold and silver, right, now's the time to get it. So, and I'll come back to gold too because all of this also relates to gold. But here's going back to the story on commercial real estate and how it pertains to what the Fed is up to. It says, the issue was not the real estate, but rather the pressure created by elevated redemption requests, which rose quite suddenly when interest rates spiked and remained elevated. That's the truth. That's the truth right there is that we had near zero interest rates for so long that now we cannot as a system handle all of this debt at elevated rates because there's so much of it. And the same thing goes for U.S. debt. And I talk about this all the time. I don't want to sound like a broken record, but as we continue to increase our debt and as buyers walk away and the Fed is forced to step in more, right, the interest on our debt is going to continue to go up, which is going to force the U.S. to print more and therefore further reduce the value of your dollars. In fact, it might get so bad that they're forced to implement yield curve control, YCC, where essentially they set the rate, they set the yield, they cap it. And anything that goes over, anytime it threatens to go over, that's when the Fed will just step in and buy, buy, buy, buy, buy. We've done it here in the United States before. We could do it again, but what does that mean for you? The last time it happened, it was near 20% inflation. Again, if you think two, three, 4% inflation is bad, wait till we have 20% inflation. How long can you survive with your paycheck not increasing or your retirement as you have it today with 20% inflation? That again is where you are going to hope that you have your gold and not even hope because hope's not a strategy, right? Have your physical gold and silver, have it outside the system. I say physical because I don't want anything in here that they can again, halt the redemptions on, right? If they can do it to them, they can do it to us in a second's notice. Now, if you personally don't already have your physical gold and silver, if you don't have a strategy for what's coming next or you have questions about any of this, call us at the number below, scan the QR code or click the link to talk to one of our expert analysts. I work with our team every single day and I truly can say they are the best in the business because ITM has been here for 30 years. And yes, we are a full service, physical gold and silver dealer. Of course, we sell gold and silver for anyone out there wondering, but we are so much more than that. You get access to truly not only myself, of course, and Daniela, but a team of some of the brightest and best minds in our space who care so much about helping people just like you protect their wealth for what is coming next. And in the meantime, if you wanna learn more about currency life cycles and about resets throughout history and how this plays out and how different assets protect your wealth, go ahead and download our built to endure report. It's completely free because we think everyone should have this information. You can do that. There's a link down below in the description or I'll throw up another QR for you, whatever is easiest, but just make sure education is paramount, but is action that will truly protect you from what's coming next. And as always, thank you so much for being here. I'm Taylor Kenney with ITM Trading, your trusted source for all things gold, silver, and lifelong wealth protection. Until next time. Thank you.