Hope you’re well.  Linked below is this week’s edition of “Tree Rings, the 10 Most Interesting Things We’ve Read Recently.”  Please note that this will be the last Tree Rings published in 2022.  We would like to thank you for your ongoing support and business in 2022 – it is greatly appreciated, and it is an honor and privilege to work with you.  We look forward to working with you again in 2023.  Happy Holidays

The Fed’s #1 job is to make the Treasury look solvent.-Michael Taylor, July 2022 We [the Fed] have been suppressing the yield curve; if rates rise, it’s a ticking time bomb.-Former Dallas Fed President Richard Fisher, 5/19/15 A surprisingly large percentage of US income tax receipts are tied to a rise in US stock prices.  When the US stock market just stops rising – not falls, but just stops rising – that will put pressure

“Fed gets a win, deflating asset bubbles without a crash” (Page 2) “BIS warns that pension funds and other ‘non-bank’ financial firms now have more than $80 trillion of hidden, off-balance sheet dollar debt in the form of FX swaps” (Page 4) US used vehicle index falls y/y by most in 25 years (Page 5) “California finance department spokesperson explains how state went from $100B surplus to $25B deficit in just a few months” (Page

…the 2nd Oil Crisis could be worked through, slowly, but the international financial system could not survive a 3rd Oil Crisis – the inflation would make it impossible to recycle the petrodollars to the oil importing countries with any hope of repayment, trade would crumble, and the system would be brought to its knees.-BIS Chair Jelle Zijlstra, 1980 Gold will only have to be repriced once; that will be much more than enough!-Anonymous monetary blogger,

“Above 8% inflation, reverting to 3% usually takes 6 to 20 years, with a median of over 10 years.” (Page 2) Fed operating loss is effectively an unintended “pivot” – the more the Fed hikes, the more money it injects into the banking system (Page 5) “Rate hikes…may be inflationary… [rate hikes are] effectively encouraging credit creation.” (Page 8) Y/y trailing 3-month US Federal spending spiked to the fastest growth since 2020-21 (Page 9) “Fed’s

In 2010, Bernanke argued that QE wasn’t dangerous because when the Fed paid out dollars to buy Treasuries, it was merely swapping one asset (dollars) for a close substitute (a Treasury bond is but an un-impeachable contract to deliver dollars in the future).  A Fed with an operating loss is completely different.  It will have to pay out newly printed dollars to banks without receiving any balancing asset even as it stops making interest payments