Bond Crisis Escalates (Uncut) 04-15-2025

Bond Crisis Escalates as Fed “Prepared” to Bailout Wall Street

Something huge is breaking behind the scenes of our financial system and the Fed just confirmed it. They are quote, absolutely prepared to stabilize markets. Translation, a bailout is coming, but somehow that’s not even the most alarming part.

Over the past two weeks, I’ve been tracking this story closely, hoping I was wrong, but now my worst fears are confirmed. Not only is the Fed willing to bail out these hedge funds again, but they are actively preparing to do it. Meanwhile, the treasury market, a key component of the global financial system is flailing and President Trump’s tariff pause, well, it might be too little too late because the rest of the world is watching and preparing for what might be a rapid acceleration of de-dollarization or a move away from the dollar.

But if that happened, then life as we know it would change drastically and fast. So what’s really going on behind the scenes? What’s actually triggering this bond market spiral? How is the Fed preparing for its next bailout? And what does all of this mean for your dollar, your bank and your financial future? Let’s get into it. Over the last few weeks, President Trump has made it crystal clear that he was willing to let the stock market suffer in order to stay strong on tariffs.

But last week, something changed that he wasn’t prepared for. It wasn’t a nation stonewalling him, it was the bond market breaking. As the headlines were monopolized by stocks plummeting last week, the bond market was quietly crashing at an even faster rate, which makes no sense because historically, bonds are a safe haven asset, which means that during times of turmoil, funds should be pouring into them.

But this is where hedge funds come in. Now I made an in-depth video on this last week if you wanna check it out, but long story short, as volatility escalated, these over-leveraged hedge funds were forced to dump their treasuries, treasuries they had gambled with to the tune of almost a trillion dollars. This is where it became clear that the entire global financial system was at risk because if the bond market had actually crashed, we would be looking at a global liquidity freeze because U.S. treasuries aren’t just another financial asset, they are the foundation of the entire global monetary system.

It’s impossible to explain just how important the U.S. treasury market is to you, to me, to every company, nation. Everyone relies on these as collateral and a store of value. Debatable, but they do, which is why President Trump had to walk back on tariffs and enact the 90-day pause, which he himself said.

He said that he was watching the bond markets and people were getting a little queasy, aka full-blown panic. Yeah, I saw last night where people were getting a little queasy. But here’s the problem, even that wasn’t enough.

Although this week yields are slightly down, which is a positive thing for bonds because they have an inverse relationship, the cracks have already formed and liquidity is now officially at its tightest level since 2020, meaning we can expect more pain, not less, which brings us to a bailout. Two weeks ago, whispers started forming like clockwork, financial insiders urging the Fed to quietly create a hedge fund bailout tool, which told us two things. Number one, a crisis was incoming, which we’re seeing, and number two, too big to fail 2.0 was imminent.

But this past weekend, those whispers were confirmed. Susan Collins, head of the Boston Fed said, and I quote, we have had to deploy, quite frankly, various tools, and we would absolutely be prepared to do that as needed. Various tools, don’t you love that phrasing? Because we know exactly what those tools are.

We saw them in use in 2020, and instead of fixing the problem, they buried it, and to no one’s surprise, it’s back again. I mean, ask yourself, if you were a hedge fund, why would you stop? If you could go into a casino today and gamble whatever you wanted and keep all of your winnings and have someone else cover all of your losses, there’s no reason to stop, no accountability, no responsibility, just more risk and more bailouts when the risk blows up. I’m gonna tell you what I think is gonna happen, but let me know what you think in the comments below.

But before you say, oh, they’re probably just gonna do a rate cut, think again. Boston head Susan Collins went on to say an emergency rate cut would not be their preferred choice, that they would rather implement the other tools. Now, many of you asked in last week’s video, what would a bailout actually look like? Which is a great question because you’re right, it’s not 2008 all over again, they’ve gotten smarter, craftier, sneakier, they’re not going to call it a bailout this time.

If you walk down the street right now and ask anyone you meet, hey, did you know that there was a hedge fund bailout in 2020, most people will have no idea what you’re talking about because of the tools that they use. But make no mistake, it’s still a bailout, it’s still inflationary, it’s still going to make the wealthy wealthier and destroy your purchasing power, it’s money printing by another name and the rest of the world, they see it too. As the selloff of treasuries has escalated, we are seeing more investors, more nations moving into commodities like gold.

The bottom line is bonds have lost their safe haven status to gold. But this is new, this is something where normally we would expect to see money piling into bonds. The fact that it’s not right now, that all funds are moving into gold, that is telling us that something has switched, something in the global financial system, order of the world has switched and we’re not going back.

Now, speaking of foreign investors and nations, some are claiming right now that this selloff is largely due to China, one of the largest foreign holders of US treasury bonds, that they are dumping their treasuries. I don’t know that for sure, I can’t confirm or deny that, but I will say, if you were a country and you had 145% tariffs slapped on you, essentially economic sanctions, would you want to be buying debt of that country who imposed those tariffs on you? Or would you probably be reducing your buying and potentially thinking about selling? It’s a card that they definitely could play, one they might not have played yet, but it’s something they could do if they wanted to. But that makes this even more concerning because if China hasn’t sold yet, and we’re seeing the treasury market as shaky as it is, supposedly the most deep and liquid treasury market in the world, well, then that should be concerning for what could be coming next from retaliation.

Because it’s not just China either, the BRICS nations and plenty of others have made it crystal clear that they would love to see a world where the dollar is not king, a new world order. But if the United States keeps weaponizing its currency, cracking the bond market and printing its way out of every problem, well, those nations might just get their wish. But one thing’s for sure, they won’t be rushing in to save us.

So what does the Fed do when foreign investors leave, confidence crumbles and liquidity dries up? Most likely we’d see a combination of bond buying programs, which is where the US treasury would issue debt and the Fed would buy it with money that they created out of thin air, as well as a ramp up of emergency bank lending, which would come at a cost to the Fed, all tools that are inflationary. But if you’re still not convinced that the Fed is going to enact a bailout, well, let’s talk about something that you won’t see on the mainstream news, the Fed’s overnight reverse repo facility. Now, don’t let the name scare you off.

They make it sound deliberately complicated so that the average person tunes out, but you shouldn’t, because the chart we’re going to look at here in a minute shows exactly just how much stress is on the system. Think of this facility like a big pawn shop for Wall Street, where big banks and financial institutions can take in an asset of value like treasuries and exchange it for quick cash with the promise to buy them back later, which is fine in normal times. But what happens when everyone wants to pawn their assets at once? Well, the pawn shop, they might not have enough available cash.

But remember, we’re not talking about people bringing in their old jewelry. We’re talking about trillions of dollars worth of US treasury bonds. When that happens, when there’s no more cash, bam, a liquidity crisis.

That’s exactly what happened in 2020. And what did the Fed do? Instead of saying we can’t support this program anymore, no, they supported it. They took the assets in return, lent out freshly created money to the tune of $400 billion.

Now, this was barely covered in the media. They claim it’s not quantitative easing, but if it walks like a duck and quacks like a duck, it’s probably a duck. Now, with all of that in mind, let’s look at the reverse repo chart together.

When the line goes up, it means that there’s more cash in the system and banks are looking for somewhere safe to park their cash. This is what happened in 21 and 22 during the stimulus flood. But now, if we zoom into present day, you can see that that cash is being drawn out and being drawn out fast.

At its peak two years ago, this facility held two and a half trillion dollars. Just two weeks ago, it held 400 billion, but today, 98 billion. Why is this so concerning? Because when this runs dry, when this hits zero, the Fed loses a critical buffer, and they are not just going to let liquidity stop and have the system seize up.

Those various tools they were talking about, they are going to warm up the money printer, put it on overdrive, and start pumping more cash back into the system into US banks. This is how they do it. This is how they get away with creating a bailout without coming out in the news and saying, we are enacting a bailout.

We’re talking about the next phase of the reset, one that will destroy your purchasing power, hollow out your savings, and leave you and I holding the bag for their gambling, for their reckless decision-making, for them playing fast and loose with our hard-earned dollars. See, those empowered, those who are paying attention, they already understand this. That’s why we’re seeing this rush into gold, because people are finally waking up and realizing that they need a safe store of value, a true store of value for their money, real money, not fake fiat currency, because everyone who’s not paying attention while the Fed quietly prepares for this next bailout, well, those are going to the people who are crushed and left with nothing.

The system isn’t being saved, it’s being reset. All I can say, all my advice is that, again, please make sure you have a strategy in place that you are prepared for what’s coming next, because things are happening and they are happening quickly. If you have any questions or you want to talk to someone about getting that strategy in place or understand how we at ITM Trading can help you, you can always call us at the number below, click the link in the description to set up a time that works best for you, or scan the QR code and set up a time to talk to one of our expert analysts today.

And while you do that, I just want to say, as always, thank you so much for being here. I so appreciate you. I’m Taylor Kenney with ITM Trading, your trusted source for all things gold, silver, and lifelong wealth protection.

Until next time.