Tom Luongo Weighs In: It's A Davos v. The Fed War
I changed the title of the Youtube that I’ll be summarizing, and I think the text of the summary will tell you why. While “Wall St.” definitely turns up in Luongo’s presentation (there’s give and take but, again, you’ll see the why for my choice of words), the focus is on the Fed. And I think the reason is that the Fed is presenting a more organized and unified policy program than you could get from an amorphous “Wall St.” Thus far, since the banking crisis began with the closure of Silicon Valley Bank (SVB) last Friday, Luongo has yet to present a more or less full length narrative—although the shape of that narrative has been clear enough for those who have followed his commentary as well as from his recent tweets. That changed today with his appearance in Rogue News In The Morning : Special Guest Tom Luongo Davos vs WallStreet WAR!!!
The Youtube is 68 minutes long, but my summary—which is heavily, but not entirely, in the form of excerpted transcriptions—can be found for the most part in the first 20 minutes. Overall, I found this to be a highly coherent explanation for what’s going on and what to expect going forward—because there’s lots more to come. My insertions are in brackets, my comments are the indents. I also added some tweets, etc.
Starts at 1:50.
Christine Lagarde [President of the European Central Bank, ECB] just raised interest rates 50bps, and the [curency futures] markets shrugged and said: We're still gonna crush the Euro out of existence.
In what follows Luongo will explain why this is important. The ECB is a creature of the Davos globalists, who in turn are largely creatures of George Soros’ agenda for world government. As such, they are at war against US sovereignty, with the help of their followers here and their bought politicians here. This explains why a champion of a sovereign US like Trump had to go. It also explains why globalists have used their control of the US government to launch a war against Putin’s Russia, which asserts its sovereignty unabashedly and has an outsized influence due to its natural resources treasure chest.
Last week the Fed gets the Triple Scalp. They get Silvergate, they get SVB, they get Signature. All ESG-globalist-woke central-DNC money laundering--all of this stuff. Major faucets for the New Eurodollar system that they were trying to create. Through crypto. [Can’t be emphasized enought—crypto is part of that dirty system.] Eurodollars are offshore dollars that are levered up in the shadow banking system overseas and then brought back over here. Danielle DiMartino Booth reminded everyone this week that SVB fought against being designated as a Systemically Important Financial Institution (SIFI). If that had happened it would have put SVB under different regulations, whereas SVB wanted to operate as a sort of onshore shadow bank. Levering up their portfolio and having dark pools of money, etc. at the service of the globalist Left. [Why do you think Barney Frank first wrote the new banking laws, then left Congress and went straight to Signature?]
Here’s the Wikipedia definition of Shadow Banking:
The shadow banking system is a term for the collection of non-bank financial intermediaries (NBFIs) that provide services similar to traditional commercial banks but outside normal banking regulations. Examples of NBFIs include hedge funds, insurance firms, pawn shops, cashier's check issuers, check cashing locations, payday lending, currency exchanges, and microloan organizations.
The significance of the Shadow Banking system is that it allows for leveraging US dollars held overseas, outside the Fed’s regulation. This is a major vehicle for inflation of the dollar and thus is also the vehicle by which Davos uses offshore dollars to effectively buy off the US government and US corporations and bend them to its will—whether that will is the sexual perversion agenda or the war on Russia. Robert Malone has a lengthy article today on the whole subject of George Soros and his Open Society Foundation, which is the driving force behind globalism [one world government]:
The influence of George Soros on American politics ‘cannot be underestimated’
In these excerpts Malone is quoting Fox News:
Liberal billionaire George Soros is tied to some of the most influential media figures in the United States and abroad through cash he provides to groups affiliated with them, according to a new study conducted by MRC Business.
‘The over $32 billion that leftist billionaire George Soros poured into his organizations to spread his radical ‘open society’ agenda on abortion, Marxist economics, anti-Americanism, defunding the police, environmental extremism and LGBT fanaticism around the globe has paid dividends,’ MRC Business analysts Joseph Vazquez and Daniel Schneider wrote.
As reported by CNBC:
George Soros’ backed nonprofit invested at least $140 million into politically charged nonprofits just one year before the midterm elections.
Those donations are on top of the more than $170 million Soros personally contributed during the 2022 midterm election cycle to help Democratic campaigns and political action committees.
This should explain sufficiently why these dry seeming monetary matters are so existentially important on the culture war front, the foreign policy front. It’s all tied together.
Now, back to why the Fed acted to shut down these three banks.
It was very clear [these closed banks] were doing that [operating as shadow banks for the globalist Left, aka Davos], so the Fed needed to take SVB out because the Fed is at war with the offshore dollar system. The offshore dollar system [overseas dollars not controlled by the Fed] is the tail that wags the Feds monetary policy dog. [By creating dollars outside the Fed’s control.] Powell inherited a dog that was on life support. Powell has done what he can for the dog over the last few years to make it healthy, and now the tail isn't the only thing that matters. Now the Fed is putting an end to the system that made it possible for the tail to wag the dog.
When Powell raised the Reverse Repo rate 5bps above the Fed Funds rate the whole financial system [as it was] collapsed overnight. It took 5bps to break the world? That revealed the real-world weakness of the globalists who relied on Eurodollars to wag the US dog. That could only last as long as the dog allowed it to go on. Powell is putting a stop to it.
Taking out SVB was a necessity, the same way taking out FTX [the Leftist cryptocurrency exchange and cryptohedge fund] was a Fed hatchet job to take out a hub of the Crypto-Eurodollar system. Because that's all stablecoins are—they're just Eurodollars.
Again, crypto is a way of laundering dollars for the purposes of the Davos globalist system that is based on offshore dollars—Eurodollars. The Fed needed to get control of cryptocurrencies to reassert US control over its own currency, the dollar.
Next, Luongo explains how ‘this time is different’ really applies in this case. 2023 is different from 2008, because this is the Fed engineering a preemptive strike against the globalist conspiracy against US sovereignty. And he explains the differences. Instead of bailing out the big banks—which don’t need a bailout this time around—Powell is shoring up regional banks that might otherwise be casualties of his war on Davos. He’s doing that as part of his drive to restructure the US economy on a sound dollar basis. This is why he acted swiftly, to eliminate uncertainty.
12:45
Powell and Yellen had to sit down on Sunday night and craft a deal, and Powell wanted a deal as quick as possible. Why? Always in the past Fed chairs--especially Yellen and Bernanke--have delayed while Wall St. went and raided all the regional banks for their high quality assets to patch up Wall St. balance sheets. That's what happened back in 2008.
This time is different.
Evidence for that deal, and that Powell got what he wanted? This:
The major banks aren't the ones in trouble. There's no worry at JPMorgan, or Goldman--none whatsoever! Over at Silicon Valley Bank? Pull my other leg--it plays Jingle Bells.
On Monday morning, if JPMorgan were looking to roll up the vulnerable regional banks, Powell wouldn't have moved quickly.
That's not what happened.
Regional banks were all saying, Oh no, we're gonna get rolled up and killed, but by Monday afternoon they'd seen serious capital flow into their banks. Powell had shored up their balance sheets by making the *holes* in their balance sheets *whole*, by backstopping them at par. So all the rate hikes, up till now, have been indemnified. The banks are now able to go forward.
Why have credit unions only been paying 1.5% on savings accounts, when the Fed Funds rate is at 4.5%--why can I only get a better rate in money markets or CDs? Because the banks didn't want to pay that vig out, because they were trying to take that difference and fill that hole in their balance sheets that had been made by all the Treasuries on their balance sheets having dropped by 25-30% in value. That's why.
So Powell backstopping [regional banks] at par now allows them to start offering savings rates that are above the zero bound. Oh! Does that change the dynamic in the US banking system? Does that change the dynamic in the US banking economy? We're now gonna start seeing 3.5-4% passbook rates on savings accounts in the United States. People will start servicing debt, and that's gonna be disinflationary.
Who doesn't get to participate? Foreign banks. Foreign hedge funds. Foreign shadow banks. You have to have US branches doing business in US dollars--which just makes them regional US banks.
Powell gets 90% of what he wants [by doing this deal with Yellen]. He shuts off the faucets of the offshore dollar system. The Fed will be calling the shots on all dollars.
42:55
People don't realize that everything the ECB does is now a rearguard action and that Powell is in complete control. I think we're heading for a rate shock to monetary futures. I'm thinking 25bps rather than 50--"threading the needle." And on and on, staying ahead of the ECB. The ECB going 50 today shows they're worried about their credibility.
Powell can afford to proceed in a measured manner now that he has shored up the Fed’s position and control. Having secured control over the dollar he now has other policy tools to continue his disinflation—and hopefully minimize hardship. However, that won’t change things for federal government finance. Financing the debt will still be much more expensive. And that means strong downward pressure on government spending—recall that little more than a week ago Powell openly said that Fed rate policy would not be influenced by government budgetary desires.
Now we sit back and see how this works out. Also note: Whether or not there’s a connection, both Macgregor and Luongo see the point of maximum pressure on the Zhou regime 3 months out from now. Meanwhile, the revelations of the Zhou family’s corruption keeps piling up.
I eagerly await the 5.00% savings rates, the local Ford dealer having to sell that new Bronco I have been eyeing for 10% below MSRP ! We'll know for certain that Powell has succeeded when the F-35 & B-21 programs are cancelled, no more obsolete aircraft carriers are built and most of the existing fleet is mothballed. Senators/Warmongers will wail and gnash teeth, and I shall rejoice at hearing the lamentations of their women, especially Ms. Lindsey.
Years ago I remember reading that Soros would be put in jail if he set foot in France because of the damage he had done to the French franc or economy. There are players on the world stage who couldn't care less about the damage they are causing. There are others who do not understand the effect of what they are doing. Then there are those who simply kick the can down the road and are only concerned with their immediate goals. I assume Powell is conscious of the danger to the world economic system we now face and doesn't want it to crash on his watch. In addition to this the big banks have skin in the game and stand to lose big if the American economy blows up. They are the adults in the room. Our politicians have created this problem they have no understanding of and in any case will not deal with. Reality trumps everything.