The Crash Will Be WORSE Than 1929 & 2008 - Rafi Farber’s Last WARNING
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The yield spread between 10-year and 3-month Treasuries has returned to positive territory at 0.6%, signaling a shift from inversion. Historically, after the spread turned positive, recessions followed within 3 to 6 months, as seen in 1990, 2001, and 2008. This pattern aligns with the post-1990 era of the fiat dollar system gaining momentum, suggesting we may be nearing the end of the current cycle.
"Most economists only started calling a recession in September of 2008, not understanding that it was not the financial crisis that caused it — it was the Fed, and the crisis exacerbated it," says David Rosenberg of Rosenberg Research.
Rafi Farber, a financial analyst, frequently discusses the implications of central banking actions and emphasizes that the current shift in the yield spread above zero reflects tightening monetary conditions, where higher interest rates reduce borrowing and slow economic activity. This often leads to defaults, economic slowdowns, and financial crises. While the correlation between yield spread changes and recessions is strong, it's not causative—it's more about tighter money, reduced bank lending, and economic constraints. Historically, since the fiat monetary system gained traction post-1990, such conditions have preceded recessions within months. This cycle marks the end of a printing phase, where tighter money signals the system's limits.
Rafi Farber recalls that the current yield curve inversion (10-year minus 3-month spread) began on October 25, 2022, and lasted over two years—the longest since at least 1989. Previous inversions lasted shorter periods: about 13 months in 2006-2007, less than a year in 2000-2001, and 6 months in 1989. Longer inversions may signal more profound financial crises as prolonged tight monetary conditions strain the economy more severely, amplifying systemic vulnerabilities before a downturn.
Central Bank Digital Currencies (CBDCs) are government-controlled blockchains for tracking transactions, adding surveillance and complexity to the monetary system. While not a new currency, they risk destabilizing an already fragile economy and may hasten its collapse rather than prevent it. The Reserve Bank of India (RBI), currently running a pilot for the country's central bank digital currency (CBDC), is looking to collaborate with the US and European Union before deciding on a full-scale rollout of the digital rupee in the coming years.
Government efforts to control inflation, including through CBDCs, have historically failed. Restrictions like spending limits often drive markets to adapt with alternatives such as gold, silver, or barter, fueling the rise of decentralized economies and black markets.
“In a similar manner to how privately-issued ‘wildcat’ currencies were replaced by government-backed central currencies in the late-1800s, Central Bank Digital Currencies (CBDC) will likely need to replace stablecoins as the primary form of digital currency underpinning tokenized transactions,” the report, which was prepared by the Treasury’s Office of Debt Management, said.
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