So I Just wanted to make sure that all of you guys were aware. I Just read an article and also watched a video that broke down the 94 billion dollars that was just added to the Federal Reserve's balance sheet. A lot of you guys might have heard. We talked about this last week where because of what was going on with Silicon Valley Bank and other Banks uh, there was nearly 300 billion dollars that's with a B right was added to the Federal Reserve's balance sheet.

Now you might be scratching your head because if you heard anything about quantitative tightening, quantitative tightening means that they are trying to reduce their balance sheet. The Federal Reserve had a goal of month over month to be able to reduce their balance sheet up to 95 billion dollars every single month. Last week it was 300 billion that they added, not reduced that they added because of what's going on with the banks and because of their new program they added an additional 94 billion in just the past week for additional liquidity for these. Banks Now supposedly I wanted to share this with you guys.

Supposedly this is not supposed to actually hurt our inflation, right? Believe it or not, once these reserves or this additional liquid liquidity ends up uh, drying out, right? So once they finish off what it is that the Federal Reserve is currently offering, uh, supposed to, uh, be paid back, it's supposedly at a very attractive rate, which is why so many banks are taking advantage of it. Supposedly this is not supposed to be anything that is is uh to you know, highlight any signs of uncertainty with what's going on with banks. It's literally just to provide additional liquidity for banks at a very attractive rate. For those that need it, right? 94 billion this week, 300 billion last week.

Quantitative tightening means that we are supposed to reduce the balance sheet. Quantitative Easing is that we begin to add to the balance sheet. I Wanted to show you guys this because for those that are a little bit maybe unaware of what that might look like is the Federal Reserve has this, you know, overall asset under their balance sheet, right? And you can see that in 2017 To that right, this is the time frame right here: 2017 2018 2019 We were sitting right around four trillion dollars. So this is trillion not billion not million with a T, right? So this was four trillion dollars.

I Mean that was already a really high number, but because of what happened with Kovid, right? You guys remember all of those stimmy checks that were being printed right? Everyone got 1200 every single month or something like that, right? Uh, you get a stimuli check I Get a stimuli check. Everyone gets a stimmy check if you're under a specific tax bracket. We went from 4.1 trillion all the way to seven. nearly 7 trillion in just two to three months.

I Just wanted you guys to be aware of that timeline, right? We started in May or March my bad: March and by June we were at 7 trillion already. right? They continue to print these stimi checks. We're sending money everywhere, right? Everyone needed to stimuli checks, stimmy checks here, stimmy checks there, or stemi checks everywhere. Now we sat.

Uh, we were nearly at nine trillion dollars. So more than double is what we experienced with how much the how much money the Federal Reserve was printing or creating. So when asking the question of why did inflation get so out of hand, well if you print right 80 of the money that's in circulation in just the past two years and you print all of that right, the idea of printing money and when you hand it to the average American the average American doesn't normally save their money, right? The average American actually begins to spend it. And this does promote economic growth.

which is why if you look at the Timeline right 2000 2021 We had amazing years, right? The housing market was booming, the stock market was booming. It was an amazing time to be invested. It was an amazing time to be an investor to be a business owner. Things were thriving.

but then, just like always, when you print too much, inflation will catch up. And that is why, right? If if I hold a million dollars and then all of a sudden they begin to create more money, right? The more money that is created, my million dollars becomes a little bit less worthless, right? And the more they print, the more worthless that my money becomes. That's the idea of inflation when your money begins to be worth less. Right at the peak, our inflation rate hit 9.1 percent.

Right now, we sit at six percent, right? and we've been going down pretty much every single month, so that's actually been really good. The reason that I'm bringing this up is, well. we're supposed to focus on reducing this balance sheet and the way that the Federal Reserve can reduce this balance sheet is that they sell mortgage-backed Securities right? And or when it comes down to their treasury bond that they offer, then they sell those as well. The really cool thing about this is that you know they weren't doing.

they weren't doing a great job. As you can see from 8.9 trillion, you know I went from Eight Point to 8.5 The very bottom. We hit about 8.3 and you know. So we scraped off about 700 billion of that right, reducing that balance sheet.

and then all of a sudden and this isn't even kept up to date right? because this only goes up until if I'm not Saken March 15th. So this hasn't added the most recent 94 billion with everything that's going on, but this is pretty much just putting us right back at where we started. The more money that we print, the more money that we send, the less valuable our money becomes. And because of what's going on with the banks, the Federal Reserve finds it to be.

You know a good reason to offer these type of to offer this type of liquidity, right? So they print more money. This? They offer this liquidity for banks and then they add more to their balance sheets. Supposedly, this does not go against their quantitative tightening plans I Just don't understand it right? in the sense that we have this goal to reduce the balance sheet up to 95 billion dollars every single month and it has not happened right? We're only adding more to it and this is at a time, so you might be asking Ricky Why does this even matter? The reason I'm sharing this with you guys is looking at this on the day chart, right? This is at a time where the Federal Reserve is trying to Pivot they're printing out all of this money. There's already uncertainty with the banks, and at a time when the Federal Reserve is supposed to.

Pivot Meaning that instead of raising interest rates, the market right now is factoring in that not only will they stop, but they will begin to cut back on interest rate hikes, right? Meaning actually reducing these overall interest rate hikes, making it less expensive for banks or Bank institutions right to actually borrow money. This is the crazy part about this is if if they actually do begin to do that right I just feel like it's going to put us back at square one. But you guys can let me know down in the comment section. Um, how do you feel about what's going on with the Federal Reserve Do you think it was a smart move for them to provide this kind of liquidity at a very attractive interest rate for banks that have not even you know established new regulations.

Supposedly there's new regulations that are going to be put in place that will restrict how much Banks and institutions have to keep in reserves, pretty much reducing the overall leverage that they can have on their capital and what they're able to lend out. I Think it's going to be a very interesting next couple of months and I Don't think that what we're experiencing now or what we're seeing them do now I Don't think that we're actually going to experience the effects of it until later down the road. This is not something that happens overnight. It takes time for the market to digest it.

I Just thought that I would share it with you because I Think it's important for you guys to know what's going on with the Federal Reserve I Mean the Federal Reserve prints money right and knowing that they are continuously printing more money, adding more to their balance sheet when they state that their focus is to reduce their balance sheet. I Think that if you are invested in the stock market, it is your job to be kept up to date with. you know, knowing this exactly right, so you can make a more informed decision on your long-term plays. Or you know, if you feel uncertain because of what's going on than to, maybe you know, be a little bit more well.

Diversified In a way to be able to do that is again, instead of investing in individual stocks, then being a little bit more exposed to diversification by being invested in something like the S P 500 ETFs NASDAQ ETFs Dow Jones gold, silver, Treasury bond. Whatever it is that you see fit right, but the idea is to have Diversified enough positions that if things do get worse, you're able to minimize that loss, right? There's no question that I believe that markets will eventually recover as they always do. but I just think we're being put in a very sticky situation. but I'm very excited to follow up so again.

I'll see you guys tomorrow for our live trading session with the Lpp team. If you want to be able to watch me trade live as soon as tomorrow, that's that second link in the description down below. I Appreciate your time, hope that we're under a thumbs up. Please consider subscribing and like always, let's make sure that we're in the year on our green up.

Thank you to the team!.