Former US Treasury Secretary Larry Summers warns of “US economic doom loop.” (Page 2) “Yellen flags potential for buybacks of USTs” (Page 5) “Yellen says any changes to UST’s Supplementary Leverage Ratio is a matter for banking regulators to decide” (Page 7) “Look for Fed in coming months to increase their 2% inflation target to the 3% to 4% range” (Page 9) One market fear barometer at levels seen only near major equity market lows:

We are worried about a loss of adequate liquidity in the [Treasury] market.-US Treasury Secretary Janet Yellen, 10/12/22 If your deficit projection starts to get out of control and your real interest rates start to rise rapidly, you can get into a kind of doom loop.  We’re going to need to be watching our own fiscal projections in the United States very carefully.-Former US Treasury Secretary Larry Summers, via Bloomberg TV, 10/21/22 Treasury is working

Biden: “I’m not concerned about the strength of the USD.  I’m concerned about the rest of the world.” (Page 2) Foreign private investors buy a record net $174 billion in USTs in August (Page 4) “Japan’s big trade deficit fuels inflation via the JPY’s decline” (Page 6) “USTs are so oversold there’s no historical context within the last 47 years to compare with what’s happening.” (Page 8) “US economists now expect a recession, job losses

I do not play according to a given set of rules; I look for changes in the rules of the game.-George Soros It is dangerous to be right in matters on which the established authorities are wrong.-Voltaire Key points: The oil market and therefore Putin and Russia were supposed to break well before the UST market; to the surprise of US policymakers (but not FFTT readers), the opposite has happened. When we wrote in April

“This is a f*cking war” – JP Morgan CEO Jamie Dimon (Page 2) “The U.S. needs a large amount of capital flowing back to sustain its daily life and its economy.  If any country blocks that capital flow, it is the enemy of the U.S.” (Page 3) “[Saudi] cited a western plan for an oil-price cap as a direct attack on oil producers, saying ‘It’s us against them.’” (Page 6) “New US government export controls

Our prosperity has been based on cheap energy coming from Russia.-Josep Borrell, High Rep. of the EU for Foreign and Security Policy, 10/10/22 Kill every buffalo you can! Every buffalo dead is an Indian gone. -US Army Col. Richard Dodge, 1867 Not so long ago, British scientists have successfully come to the same conclusion, as was published in the Conclusion of the U.S. Geological survey a few years ago.  Namely: Europe will not be able to survive