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The U.S. financial system is locked in a high-stakes feedback loop where massive Treasury debt issuance is driving stock prices to historic extremes. Fueled by a trillions sized leverage trap in the repo market, this “perpetual motion machine” of asset inflation has pushed market risk indicators to levels rarely seen in history.
While the Fed has launched a new liquidity firehose to prevent a systemic break, a massive technical “tsunami” looming in May threatens to overwhelm these defenses.
This report breaks down, and illustrates, the exact mechanics of this debt-to-equity trap and identifies the critical triggers that could lead to a sudden, violent deleveraging event.
It suggests your investment strategy for dealing with the facts, as opposed to the Fed or Street narrative.
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