Private Credit is the Fuse (What Comes Next is Bigger)

0:00Six of the biggest financial firms in the world are shutting the exits on investors. Blackstone, Apollo, Aries, Blue Almorgan Stanley, and Cliffwater, with some halting redemptions, one fund even closing. Now, the mainstream media will tell you everything is fine. It is not. And if you have money in a bank, any bank in the United States, this is a story about you, because here's what nobody's connecting. These firms, they don't exist in a vacuum. They are funded by the same banks holding your deposits. And what happens on Wall Street doesn't stay on Wall Street as cracks. In this $3 trillion market start to form which they are, it spreads into the system, into banks, and into your wallet. But here's the part that should stop you cold. These same banks, they're not just exposed to private credit. They're exposed to over $200 trillion of derivatives,

1:00or as Warren Buffett calls them, financial weapons of mass destruction. The same derivatives that almost brought down the entire global monetary system in 2008, a web of highly leveraged bets based on interest rates, credit, and liquidity, all three that aren't jeopardy right now. Meaning, this isn't just a $3 trillion crisis. This is the pressure point for a $200 trillion plus crisis just here in the United States. And what's worse is that what's happening right now in private credit isn't random. It's a signal that we are moving through the currency life cycle and towards a monetary reset. So by the end of this video, I'm going to show you what exactly is going on in this market. While your bank is more exposed than anyone is admitting, and most importantly, how you can protect yourself before it's too late. Think of private credit as shadow lending. Traditionally, when a company needs a loan, they go to a bank.

2:02But after 2008, regulators clamped down on the riskiest lending, or at least they did on paper. But this wasn't good for profits, so a new industry was born, firms like Blackstone and Apollo, started lending directly to companies mostly. Private equity backed businesses, ones that operated with no transparency and little oversight. And for a while, it worked. For them, borrowers got their money, firms got their fees. And in industry that was almost nothing 15 years ago, grew to $3 trillion today that we know of. But this was all based on liquidity, low rates, and available credit. As long as that was all happening, nobody was asking any questions. But private credit is the child of a very specific monetary environment. Zero rates. High risk means rewards and no hard questions asked. And up until now, it has never, not once, been tested through a full credit cycle. That is until now.

3:03I have been talking about a liquidity crisis brewing for the last few years. The frozen redemptions, the blocking the exits, these are not the crisis. They are the signal of what is deteriorating underneath. The simplest way I can explain what's happening right now is that the assets themselves, the loans are illiquid. Because there's no market for them, no one wants to buy them. Since private credit is private and there's no open market involved, the fund managers themselves have gotten to decide what these assets are worth. They are fabricating valuations. But as rates have risen and held steady, and all the sudden, these companies are failing and struggling, there are no investors who want to take on this bar or risk. So the difference between what a fund manager says these so-called assets are worth and what someone will actually pay for them keeps getting wider. That's why investors are running for the exits because when they're smoke, there's buyer.

4:05And it's not a couple of contained failures. Many of these companies that supposedly have these high valuations again are based on nothing. So everyone is trying to leave all at once. But when billionaires are blocked from exiting, that should make you sit about home. This is not just a story about private credit. This is a shift in the entire system. All currencies throughout history follow the same pattern. There is a currency life cycle for all fiat currencies. And it always starts the same way with credit expansion. currency creation and over printing. During this period of time, it feels like prosperity. But during this time, risk is building quietly. And when confidence starts to collapse, liquidity vanishes, and that's where we are right now. See, private credit is just where it's showing up. This is our tell. This is our signal for everyone out there watching of what's coming next.

5:06Remember at the beginning of this video, when I said that private credit was never really separate from the banking system. It was just an illusion on paper to please regulators. The funds are funded by US banks. Your bank, my bank, the same banks holding our deposits. The separation of risk was just an illusion. It was never real behind the scenes. The risk was actually growing to levels far greater than they were in 2007, 2008. And on top of that, at this point in time, the Federal Reserve Bank of Boston has come out and admitted that today, US banks are the primary funding source for private credit. The exposure never disappeared. It only grew quietly behind the scenes in the shadow in the shadow lending sector. Now, this is where the derivative layer really comes into play. But before I break down what exactly that means for you, drop a 2008 in the comments. If you think this is great financial crisis all over again,

6:06or tell me if you think that this is going to be worse, do we have a reckoning coming, something that we are not even prepared for? Let me know in the comments below because the pressure is on. In fact, I just saw a quote this week from Michael Burry, the famous trader who predicted the 2008 great financial crisis and was popularized in the movie The Big Short. He came out and said this week, everyone in PEMPC knows exactly what is going on. They are remarkably proficient at kicking the can down the road, but it looks like the end of the road to me. But what does the end of the road actually mean for you and me? Well, picture we had the end of the road. And there's a fork, okay? And there are two options. There are neither one. He'd to spoil this, but neither one are going to be good for us. Okay, but on one side, we have a bail out, right? Private credit tied to US banks, derivative exposure goes off, catastrophic, what do they do? They bail out the banking system. This is 2008 playbook all over again.

7:06We know how that ends with the fed firing up the printing press and an extreme devaluation of our dollars because contrary to 2008, this bailout would be huge in scope and size. Not the 2008 wasn't huge, but we're way beyond that now in terms of the numbers we're talking about. On the other side of the fork at the end of the road is a bail in. A bail in is where instead of bailing out the banks, they bail in the banks using depositor funds, your funds, my funds to make the bank whole again. And before you say that's not legal, that will never happen. It absolutely is. Following 2008, they changed the rules. They changed the playbook. They made it legal the same way. It's happened in Lebanon and in Cyprus. They're ready. They know that the FDIC, the federal deposit insurance corporation, that gold sticker on your banks window that's supposed to tell you everything's okay, that you're safe, you're protected, your deposits are insured. They only have 1.3 percent of total deposits insured in their deposit insurance fund,

8:07meaning that if one large bank or two mid-sized banks were to fail, they already don't have enough funds. And I know, I know someone out there is going to go. So what we've seen them do before, they'll make it work, they'll figure it out. No, no, no, I'm telling you right now. Why else do you think after 2008, they changed the laws to make a bail in legal? It is the international playbook that is in place waiting and no. They don't want to do it, right? But they will when we reach that fork in the road. If option one isn't looking too good, they're going to move on to option two. Let me ask you, because we've seen what's happened in other countries where bailants have happened. The posters don't have access to their account sometimes for years. And at the end of that, they might have half all of their funds seized and taken away from them. And in the meantime, inflation is ripping higher, potentially hyperinflation, meaning whatever you had in your savings account is losing value in real time. That's this kind of final stage that we're getting to before an official currency revaluation or devaluation.

9:07How long? Tell me in the comments below, how long could you last without access to your accounts? A week, a month, a year? Tell me your thoughts in the comments below, what would you do in a bail-in situation? Because the truth is, this is the reality we're up against and they won't give you warning. It will happen in the middle of the night. You'll wake up and be denied access. Private credit might well be the match that lights the fuse. And if we want to understand what comes next, well, all we have to do is zoom out. In fact, again, like I said, currency life cycles follow a pattern. The one that we've been living through with the dollar has been in motion for a long time but we're getting close to that next phase. If we go back to the 1930s, the system was collapsing under the weight of its own debt. People were rushing to the exits and rather than fix the system, what did they do? They changed the rules. Compuscating gold bullion. Rare and collectible coins were exempt. I always call that out because it's very important to understand gold laws, especially if you're concerned around confiscation

10:08because they matter. But as gold bullion was confiscated, what happened? They turned around and re-valued it. So everyone who held dollars, right? They lost their purchasing power overnight. Everyone who held gold came out the other side. That's how it always works. If we fast forward in 1971, when President Nixon delinked the dollar from gold, what happened there? Right? The United States defaulted on its promise to the rest of the world, no more convertibility of US assets into gold. What happened? They changed the rules to benefit themselves to save the system. That is what they do every time and today will be no different. In 2008, they changed the rules. Again, legalizing a bank bailant so that they were ready for whenever the day came when the system is stretched to the limit because of the debt. Every time they change the rules and every time those who protect their wealth and fee all currency, I'm talking anything dollar-denominated, they are the ones who lose everything. But there is good news. Every single time the rules change,

11:10those who hold physical gold and silver, they are the ones who are protected on the other side. And what we are moving towards right now is the end of that currency life cycle. Right, we see inflation moving to hyperinflation as this printing press is going to be fired up because believe me, when this views is lit and this entire system, this derivative collapse happens, what is going to come next? Mass printing, we're going to have potentially a bank bailant. I don't know when, people always ask when. I don't know, I can't say that, but we know the rules are there in place. Everyone who has their wealth protected in dollars they are going to be the ones at risk. Well, those who protect their wealth, again, outside of the system, outside of a number on a screen, where it's their rules, these are our rules, right? We hold these, we own them, okay? They're outside of their control, outside of counterparty risk. But I'm sure you still have a lot of questions around how you personally can protect your wealth and what is coming next? Because this is a developing story and things are moving fast,

12:12which is why I am so excited to share that I will be doing a live free webinar called Surviving the Reset, the four stages of currency collapse. It's going to cover a ton of great information. I'm doing it on Tuesday, April 21st at 9.30 a.m. Pacific and 12.30 p.m. Eastern. Again, it is completely free, but you do need a register to save your seat. I hope to see you there. You can do so by scanning the QR on the screen or there is a registration link down below. Just make sure you do it now while you're thinking about it. So you have your seat saved. If you've attended in the past, you know there is limited capacity. Now, this is a webinar that I did about six months ago. It will be updated, but many people ask me all the time. This is the number one requested. Can you do that one again? What exactly is happening since the last time you did it? Where are we in the timeline? How do I protect my wealth? We will be covering all that and more. Again, completely live with a live Q&A. I'll be taking all your questions. So once you've registered,

13:13let me know in the comments down below that I will see you there. And in the meantime, if you have any questions at all, again, about how to protect your wealth, or you want to talk to someone, you don't want to wait till the webinar. Call us at the number below or click the county link down below to talk to one of our expert analysts. And as always, thank you so much for being here. I'm Taylor Kenny with ITM Trading. Your trusted source for all things gold, silver, and lifelong wealth protection. Until next time.