| It's Official: The Fed is DRAINING Liquidity from the Financial System Dear Money & Crisis Reader, Yesterday I warned that the Fed is “pulling the plug” on the markets. The explanation for this is simple. The primary driver of the stock market since the March bottom has been the EXTRAORDINARY amount of liquidity the Fed has pumped into the financial system. All told, the Fed has printed over $3 trillion and funneled it into the financial system since February. THIS is what has pushed stocks straight up week after week. Which is why everyone should be concerned that the Fed has STOPPED doing this. Indeed, as I noted yesterday, the Fed has shrunk its balance sheet since the beginning of June. It is not coincidence that the S&P 500 peaked around that date. Which is why yesterday’s Fed release should give every investor “pause.” |
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