Postcards: Don't Eat the Fish (It Will Eat Itself)

Who thought fried fish was a good idea? Probably the same people who invented monetary policy. (Oh... the British!) ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Don't Eat the Fish (It Will Eat Itself)]( Who thought fried fish was a good idea? Probably the same people who invented monetary policy. (Oh... the British!) [Garrett {NAME}]( May 1   [READ IN APP](   Financial Winter is Here! Editor’s Note: I am bad at timing. As I noted yesterday, I’ve scrambled up to Baltimore to launch a few projects simultaneously. But that coincided with the six-month period since I left Money Map Press… forcing me to slash the price of the [Republic Risk Letter]( ([come on back]( Oh, and then there’s this week's mess for the markets. “Timing” wasn’t always my thing… until we came up with the Equity Strength Signals, which turned negative on April 12. These signals allowed us to breathe easier during this market turbulence. But that’s the advantage of following our work. [Sign up for 20% off](. [Get 20% off for 1 year]( --------------------------------------------------------------- Dear Fellow Expat: I’ve told my tales of “Small-timore,” a place where [everyone knows you or your father]( everyone knows my father). Over the last two days, we’ve had dinner at my father’s restaurant, [an Irish pub that has been]( open since the late 1990s. Two nights ago, my mother ordered the kid’s “Fish and Chips” and delivered what I believe is a portion of a Whale Shark. What child can eat a piece of fried fish the size of a Porterhouse? This restaurant has been around for nearly 25 years - and I’ve never - in the history of my visits - eaten Fish and Chips. Not only does it feel oddly un-Irish ([like me]( but it also combines… cod with a deep fryer. I’m off board. I feel like it’s something that I have to do. It’ll be my Green Eggs and Ham adventure in which you can join me. But first, I’ll need to get through the central bank to get there. Help, Help! I’m Being Repressed As I’ve warned, our central bank and Treasury Department are ready to engage in a [bout of fiscal repression](. This is where they sacrifice their integrity and kneecap market returns for participants to suppress interest in the debt. I’ll explain how they’re doing it in a second. But first, I want to explain what this does to investors. Imagine - for a moment - that you want to make enough money as an investor, taking risks, to eat steak daily. But the central bank and Treasury make it so that you can only afford Fish and Chips with your return… every day. Cod: Zero stars. Damn it. So, what are the Fed and Treasury doing? Well, they’re engaging in a shell game. Here’s what’s happening… The American taxpayer pays taxes… and the Treasury also borrows money. They are taking this cash to purchase U.S. debt on the secondary market. They aren’t hiding it… it’s all public record. See for yourself. These actions help suppress Treasury yields (the more buying, the lower the yield), and they provide liquidity to the markets. (We’re currently seeing a liquidity challenge with rising interest rates and challenges to refinance our debt.) Regarding refinancing, I’ve been warning that the buyer of last resort is the Fed, and we’re about to see the start of new operations to prevent yields from getting out of control. There is a cost to this: Inflation and other problems. When the bottom falls out… they will blame capitalism. But we know that’s not the case. How do you have capitalism when someone has their thumb on the scale. Let me briefly explain what the central bank and Treasury do… Our financial leaders are responsible for: - Market Distortions: Central banks, with their grasp over interest rates, money supply, and the financial realm, wield monetary policy tools like sorcerers weaving spells. But we in the Florida Republic decry their meddling as nothing short of an affront to the natural order of markets. Their actions throw off market signals, sending them awry and leading to a massive misallocation of resources. - Moral Hazard: Ah, the siren song of the lender of last resort! With their golden promise of salvation, central banks lure wayward financial institutions into the treacherous waters of recklessness. Behold the aftermath of 2008, which left us in a web of risk and systemic instability from which we've yet to fully escape. - Inflationary Pressures: Hear ye, hear ye! We of the Republic proclaim from the mountaintops that central banks unleash the demon of inflation upon the land with their unchecked control over the money spigot. The once-sturdy dollar crumbles like ancient parchment, its value diminishing with each reckless chime of the printing press. Inflation, the invisible hand turned cruel despot, distorts prices, befuddles calculations, and plays the cruel jester in the court of capitalism. - Interest Rate Manipulation: Watch as central banks wield interest rates like a double-edged sword. They pick winners and losers with interest rate manipulation, driving a dagger in the heart of fair competition and the very idea of price discovery. This leads to bad incentives and a misallocation of resources that festers, choking the lifeblood of long-term growth and innovation. - Debt Monetization: And here’s the punchline. This is what we’re witnessing. They can call it fiscal repression or yield control… but lo and behold, this unholy union of Treasury and Fed has put us in a place where debt is monetized at whim. We in the Republic protest! For we refuse to hold their hand in a dance of fiscal irresponsibility. When governments feast upon the fruits of unchecked spending, the principles of a free market wither like leaves in autumn. Now, I can raise the Black Flag… or I can just teach you how the system works. They’ll break things… and when everyone is panicking, they’ll patch up the system with more liquidity. You just have to pay attention to our market signals to know if there’s liquidity coming in. Right now… there isn’t as much as there is going out. So. Prepare yourself. ‘ Winter follows autumn. Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()