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welcome to episode 44 Today
we're pulling back the curtain on Stealth QE
The Federal Reserve claims
they've stopped printing money
but is that the whole story
we'll delve into the hidden mechanism
that the sources describe
as secretly transferring wealth from your wallet
and explore
how it's linked to the nation's 34 trillion dollar debt
we'll break down this invisible money printer
and discuss why
understanding it could be crucial for preserving
your wealth let's break it all down
okay let's dive deep
we're exploring a fascinating claim today
uh about a mechanism in the US financial system
one source is actually calling it stealth QE right
and the source
we're really unpacking here is an article titled
The 34 trillion Dollar Deception
how Stealth Q E is secretly devaluing your savings
right now
it's written by someone called Dana the VC
dated May 29 2025 exactly
so our mission in this deep dive is to
you know
really get into the claims made in this article
understand what this stealth Q E
thing is supposed to be how it supposedly works
according to the source yeah
and what the potential implications are for you
the listener and well
your savings the article kicks off with a premise
that might sound familiar
basically says look
the Federal Reserve insists it stopped printing money
right
but maybe your grocery Bill tells a different story
yeah you know right
it uses a pretty good analogy actually
like a magician saying they've put the cards away
uh huh
but somehow aces just keep popping out of their sleeves
and the source's core claim is that
this isn't some accident no
it's presented as a deliberate design
a hidden system and understanding this stealth Q E
according to the author is pretty crucial
if you want to protect your wealth over say
the next decade yeah
and it immediately ties this to your personal finances
I mean the article flat out says
every dollar in your bank account is under attack
wow it really sets the scene
by highlighting the sheer scale
of US government debt we're talking $34 trillion
which the source points out is roughly yeah
what $100,000 per American
something like that yeah
and the annual interest payments
they're nearing $1 trillion
the article notes
that's more than the US spends on defense
that scale
it really does put the problem into perspective
and the source presents what it calls
the uncomfortable truth
which is that this level of debt
well it can never really be repaid in today's dollars
the author argues the only politically viable path
isn't cutting spending no
it's inflating the debt away
basically making the money it was borrowed in
worth less over time
so the government's burden shrinks in real terms and
the article frames this historically
doesn't it
suggesting that ever since the Fed was created
back in 1913 yeah
the patterns been consistent
major debt crises
they get resolved through monetary expansion
not you know
tightening the belt so in this view
Stealth QB is just the latest
maybe most sophisticated evolution of that process
a hidden way to transfer wealth exactly
so how does the source
build its case for this hidden system
it talks about a few key things
there was a warning shot in 2019
right that many people apparently missed
the current perfect storm of forces converging now
uh huh
the actual mechanics of this invisible money printer
as they call it
lessons from the Silicon Valley bank collapse
yeah the perspective of people like Arthur Hayes
and then finally
some actionable steps the author thinks you can take
so it starts back on September 16th, 2019
the article paints this picture
you know
most Americans are watching Monday Night Football
but in the overnight repo markets
that's where banks lend cash to each other
short term interest rates just exploded
went from like 2% to 10% in minutes
so the source describes
banks holding tons of Treasury bonds
but suddenly unable to get cash
it uses that phrase being thirsty in the ocean
that's the one and the Fed's response
the article argues was really telling
within hours they jumped in
started buying short term securities
injecting liquidity
but officials called these technical adjustments right
not QE yeah
but the source just dismisses that as semantic theater
I mean bottom line
money was created assets were bought
stability was restored okay
but more importantly
the article suggests the Fed Learned something critical
they could provide a lot of stimulus and liquidity
without the political heat
that comes from openly expanding their balance sheet
like with traditional qe uh
so the source sees that 2019 repo crisis
less as a problem solved and more like a
a test run a proof of concept
for doing things more quietly later on
exactly that's the argument
so fast forward to today
the author argues the situation now makes 2019 look
like well
small potatoes right
the article describes what it calls
a current perfect storm
where three big forces are hitting at the same time
and it claims this is creating maybe
the biggest liquidity crisis in modern history
putting retirement savings at risk
OK what are these three forces
well force No. 1
according to the article
is just the sheer scale of government borrowing
the Treasury is issuing debt at levels
the author compares to World War 2
but we're in peacetime hmm
just in 2024 they need to refinance
about $7.5 trillion in maturing bonds
plus fund new deficits
the source calculates that out to something like
$20 billion in new debt every single day
twenty billion a day that's yeah
yeah that's a number designed to grab your attention
okay force number two
that's what the author calls vanishing
buyers hmm
so foreign governments who used to buy a lot of US debt
they're cutting back the source notes
China's holdings are down about 25% since 2021
and even domestic banks the article suggests
are getting a bit more hesitant
it points to widening auction tails
that's a technical sign the author uses to say
the government is having more trouble selling its debt
at the prices it expects right
finding enough buyers at good prices is getting harder
yeah and the third force
it's a liquidity drain
so the Fed has this thing called the reverse
repo facility the source kind of describes it as
a giant parking lot for excess cash in the system
okay at its peak
it held something like $2.3 trillion
now it's way down below $300 billion and dropping fast
where's that money going well
the money market funds that used to park cash there
are now moving it into Treasury bills
because they offer higher yields
but the effect according to the author
is it's draining
this crucial
shock absorber out of the financial system
okay so you've got massive borrowing needs
fewer traditional buyers
and this liquidity buffer vanishing
what's the conclusion the source draws from this
perfect storm it's critical
the article argues
that when that reverse repo facility
basically hits zero
which it suggests could be within months
mm hmm the government faces a really stark choice
which is either
they dramatically hike interest rates to attract buyers
for all that debt
which the source claims would crash the economy
or they activate these hidden
stealth q E
mechanisms to basically create the demand themselves
behind the scenes
and the article seems pretty sure which way they'll go
oh yeah it leaves little doubt
which brings us right to the core of the argument
the invisible money printer
how according to the source
does Stealth QE actually work
how does it function
the author calls it diabolically clever
okay because it gets around the pivotal
problem of traditional QE right
with standard QE people see the Fed's balance sheet
getting bigger and bigger
and they start asking questions
you know why are banks getting bailed out
while I'm dealing with inflation
great it's visible
it causes debate
so how does this mechanism supposedly become invisible
how does it bypass that
the article claims it works through uh
regulatory manipulation specifically
it targets a rule called the supplementary leverage
ratio or s L R
s L R okay
what's that
think of it like a basic safety rule for big banks
for every dollar of loans or investments they make
and that includes holding government bonds
they need to hold a certain amount of their own money
their capital as a buffer
like a cushion against losses
exactly yeah
the s L R
normally requires the biggest banks
to hold about 5% capital against their total exposure
and importantly
that exposure usually includes Treasuries
and even deposits they hold at the Fed
okay so that's the rule
how does the source say it's being manipulated
well the author points out
the Fed actually suspended this rule temporarily
back in 2020
they let banks hold Treasuries and Fed deposits
without counting them against this capital requirement
right I remember that
but it was temporary officially yes
it was restored in 2021 but the source claims
there's quiet talk about making this exemption
permanent basically telling banks
hey go ahead
buy and hold as many government bonds as you want
we won't make you hold extra capital against them
okay so
step 1 is removing the penalty for banks
holding lots of government debt
but how does that create money
where's the printer part right
this is the key part according to the source
this is what the author frames
as the real wealth transfer mechanism
so banks load up on Treasuries
because the regulatory limit is effectively gone
got it but what happens if interest rates rise
and the market value of those bonds
falls below what the bank originally paid
they become underwater assets
normally if the bank needed cash
they'd have to sell those bonds at a loss in the market
exactly
but here's the twist as the article describes it
instead of selling it at a loss on the open market
the source claims banks can pledge
these underwater bonds to the Fed's lending facilities
like the discount window or maybe programs
like the ones set up after SVB failed
and here's the crucial part
the source alleges the Fed accepts these bonds
not at their current lower market value
but at their original face value or par value
ah so
the Fed is essentially lending the bank
more cash
than the bonds are actually worth in the market
at that moment precisely
according to this article
the source argues the banks avoid
having to recognize
the loss on those depreciated bonds
they get full face value cash from the Fed
which injects liquidity into the system
and the bank still collects interest on the bond right
the bank profits from the interest
while the risk of the bond's lower value is
effectively shifted to the Fed's balance sheet
which the author argues implicitly
socializes that loss onto taxpayers down the line
so the outcome the source describes is what
unlimited government financing by proxy
that's the claim
it allows the government to keep issuing debt
knowing the banks can absorb it
and then pledge it to the Fed at face value if needed
the Fed's main balance sheet doesn't swell
with direct Treasury purchases
like in traditional QE
so the whole process stays kind of invisible
but money is still being created
just entering the system differently
that's the argument through banks
leveraging these assets at non market values
facilitated by the Fed
the article then uses the Silicon Valley bank collapse
back in March 2023 as a really important case study
it argues SVB's failure wasn't just
you know a one off event right
it was seen as a preview of the systemic risk
caused by holding lots of these underwater bonds
but maybe even more importantly
it showed how the system reacts to protect itself
how so well
the source notes SBB
had something like $120 billion in these underwater
Treasury bonds and apparently
they were operating under the Assumption that Fed
backstops would somehow
protect them from losses on these assets
and the author says they were partly right
kind of the Fed did step in
remember they created the Bank Term Funding Program
the btfp and that program explicitly
allowed banks to pledge
underwater securities to the Fed
at par value exactly the mechanism the source describes
so it helped other banks avoid forced losses
yes but according to the source
SVB just failed too fast they hit a classic bank run
depositor panic
before these stealth mechanisms could fully stabilize
that specific bank
so the takeaway from SVB in this article's view
isn't just a bank failed it's that the response
the BTF allowing pledging at par
demonstrated the system's priority
protecting its ability to finance government debt
even if some individual players get caught out
that's the interpretation presented
this perspective seems to align with how the source
brings in Arthur Hayes the former Bitmex CEO
it describes his view of these kinds of
stealth interventions as a
what was it financial system cancer
yeah the article cites an essay by haze called kiss of
Death Haze basically argues
the whole system is creaking
under the weight of all this spiraling debt
and the source highlights Haze's point
that these stealth interventions
even if they seem small individually
they have this really damaging cumulative effect
because they steadily debase the currency
but without the public
fully grasping the scale of the money printing
that's actually happening right
unlike a very obvious QE
which might scare people about inflation
pretty quickly this hidden approach
according to the sources reading of haze
it operates sort of under the radar exactly
which allows for potentially
much more monetary expansion before markets
or the public really react strongly
they also calls it a powerful
quiet tool for wealth transfer
and both Hayes as cited
and the author seem to suggest
this whole process will inevitably push people towards
well hard assets
things like gold maybe bitcoin
yeah as investors look for ways to escape
what they see is this systematic currency debasement
happening kind of quietly
yeah the source really emphasizes Hay's broader point
regardless of your favorite asset
the current system viewed this way
is structurally tough on people holding cash
or living on fixed incomes
okay so
given this mechanism
that the source claims is operating
what does it anticipate for the future
say the next decade
the article lays out three potential scenarios right
scenario one which the author gives a 40% probability
is called successful stealth
basically the stealth QE mechanism works as intended
the system stays funded what does that look like
inflation stays elevated but maybe manageable
say 4 6% a year
asset prices keep climbing steadily
but wage growth doesn't keep up
so you get this slow steady
transfer of wealth
from workers and savers to people who own assets
and the suggested positioning for that
the source suggests things like real estate stocks
gold and Bitcoin okay
scenario 2 that's stealth failure
given a 35% probability in the article here
the author predicts that eventually
the market figures out
just how much hidden money creation is going on
and then what inflation expectations shoot up rapidly
the Fed loses credibility
maybe they're forced back into more obvious
aggressive QE inflation could accelerate
maybe hitting 8
12% annually before they even try to tighten things up
positioning for that scenario
the source shifts focus a bit gold
Bitcoin maybe foreign assets
and interestingly variable rate debt
used as a hedge on the barring inside
against rising rates not held as an asset itself
interesting okay
and the third scenario that's deflation panic
given a 25% probability here
the ideas that maybe stealth
QE can't keep up with the government's massive debt
debts
the system hits some kind of crisis point forcing what
either truly massive
visible intervention like helicopter money
or maybe even some form of debt restructuring
the article suggests this might involve a short
sharp deflationary shock
followed by extreme inflation as the authorities panic
and positioning for that potential
chaos the source suggests
holding cash short term for the deflationary bit gold
investing in businesses providing essential goods
and again Bitcoin
it's definitely notable that gold and Bitcoin
seem to pop up in the strategies
for all three possible futures
outlined by this source yeah
that's a clear take away from the recommendations okay
beyond these broad scenarios
the article offers something more concrete
your stealth Q E defense plan 5 concrete actions
what's action No. 1 action 1 according to the source
declare the classic 60 40 stock bond portfolio dead
bold claim what replaces it
the author suggests
embracing what they call a new Trinity for allocation
40% real assets 40% growth stocks right
and 20% cash alternatives
and they clarify
real assets could include things like reets commodities
maybe inflation protected securities tips okay
40 40 20 action 2
become a debt strategist
the advice here is if you're gonna borrow money
maybe do it now
lock in fixed rates and use it for productive assets
what's the reasoning the argument is that stealth QE
is basically
designed to make debt cheaper in real terms over time
because the currency gets debased
while your income might inflate eventually
but and this is a big warning in the article yes
avoid variable rate debt the source calls it a trap
especially if that stealth failure scenario plays out
and rates spike
got it fixed rate good variable rate bad in this view
action 3 monitor what the
source calls the Stealth Q E dashboard
basically track a few specific weekly indicators
like what Treasury auction tail sizes
wider tails might mean more trouble selling debt
hinting at more need for stealth help
Fed reverse repo levels
lower levels mean liquidity is draining
bank excess reserves higher reserves
could suggest banks are getting cash from Fed
facilities maybe by pledging assets
and the 10 year Treasury yield
compared to inflation expectations
if yields fall below inflation expectations
the author thinks that could signal the market
anticipates stealth failure
and higher inflation ahead
okay so keeping an eye on those specific numbers
action 4 geographic diversification
basically
don't assume the US Dollar stays dominant forever
the source suggests considering international exposure
maybe foreign real estate
stocks and commodity heavy countries
or even holding small amounts of foreign currencies
spreading the risk geographically
and action 5 prioritize skills over savings
the argument is in the kind of inflationary world
the author thinks Dell Q E creates your human capital
your ability to earn
often becomes more valuable than just holding
financial capital so
invest in yourself
in skills that boost your earning power
faster than the currency potentially loses value
that's the idea presented
so bringing all these points from the article together
the author sums it up with what they call
the uncomfortable truth about modern money
and they claim you know
your financial advisor might not tell you this
this is that
the financial game has fundamentally changed
traditional investing wisdom
the article argues
is built on assumptions like currency stability
moderate inflation that stealth QE basically shatters
okay so what's the new reality
according to this source it's a reality where
in the author's view cash just loses purchasing power
much faster than people realize
government bonds become less like safe havens
and more like speculative bets
and assets like gold bitcoin
real estate yeah
they start acting more like monetary hedges
not just investments or places to live
exactly and crucially
the source states that people who primarily earn wages
face this kind of systematic impoverishment
unless they also own assets that can inflate
along with the money supply
the article is careful to say this isn't about morality
it's just mechanical reality
the system it argues
is designed to inflate away debt
and Stealth QE is just the newest
most refined tool for doing that
so the source concludes Stealth QE is like
the most sophisticated wealth transfer mechanism
we've seen yet
that's the claim elegant
almost invisible to the public
and the author argues
devastatingly effective at its purpose
the Fed in this view has solved its main
main political problem
it can keep the money flowing to finance the government
without the big
public outcry that comes with obvious money printing
but the article argues
just knowing about this mechanism gives you a choice
right you can stay unaware
and maybe watch your purchasing power dwindle
you can understand it but feel kind of frozen
paralyzed by how big it seems
or the third option or the author suggests you adapt
you change your strategy to try and navigate
maybe even benefit from this new monetary reality
the source describes and the article stresses
that the time to make that choice
to adapt might be limited
yeah it says the window is
in the author's opinion narrowing
as more people catch on asset prices will adjust faster
making it harder to get ahead of the curve
which leads into the source's final reality check right
the article basically says
don't expect the Fed to ever admit to running stealth
QE well
that happened don't expect politicians to suddenly
find fiscal religion given the mountain of debt
unlikely given the incentives
and all the media debates about inflation numbers
the source dismisses them as
mostly distractions from the underlying mechanism
so what does matter according to the article
recognizing the inevitability
in a system with $34 trillion in debt
and facing a trillion a year in interest payments
the source argues
monetary expansion isn't really a policy choice anymore
it's presented more as a mechanical necessity
it has to happen one way or another exactly
so the only real question left
according to the article is
whether you position yourself
to be a beneficiary of that expansion or well a
of it which leads directly to that final
provocative thought the source leaves you with
yeah stealth QE isn't coming
it's here
the invisible money printer is already running
your savings are already under attack
and then it poses that direct question to you
the listener the question isn't
whether this system is fair or sustainable
the question is now that you know how it works
what are you gonna do about it
with a final little nudge
that the time left to position yourself
might be shorter than you think
wow that is definitely a lot to chew on
from the claims made in that article
yeah the 34 trillion dollar deception
it certainly is well
thank you for joining us
for this deep dive into the source material