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Fed and US Treasury Are Ensuring that Macro Liquidity Stays Bullish

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Tomorrow, the Fed talks. But Fed talk is cheap. The Fed wants you to think that talk – its talk – moves the markets, or keeps them stable. That’s just utter bull. You and I know that from simply tracking the data for as many years as we have. Bottom line, as always, is, money talks, and the Fed’s BS is just that.

All of the discussion and paralysis by analysis in the media is a sideshow. Mass confusion that consistently misses the point. It all boils down to one simple fact. When the Fed pumps money into the financial markets via the Primary Dealers, stock prices follow the money. Everything else that happens in the economy is tangential and irrelevant.

I started tracking and charting the data that goes into this in 2002, courtesy of the NY Fed print shop. Here’s the chart that started it all. It was made famous in 2012 when Rick Santelli featured it in one of his rants on CNBC.

Many, many people have copied this in the years since I began publishing it about 17 years ago. But they all fail one basic test. Here’s what it is and why it matters. It matters so much that it could mean that the end of the financial system as we know it is at hand.

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