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What are some of the warning signs that the financial system is showing right now? Why does Ray Dallio say that we should have no less than 5 to 15% of our portfolios in gold? And how does the Fed's liquidity injection show repeated warnings about the potential US Treasury crisis? I'm Eric Sopanic. This is Steve Ran and this is the Gold Spot.
Well, Steve, we know who Ray Dallio is. He's a big deal. Um, not all of our our listeners though might know who he is. So, could you please tell us who is Ray Dalio? Yeah, Ray Dallio uh runs one of the largest head funds in the world, Bridgewwater Associates, and he's been right on the uh the cusp of telling everybody for years about what's been happening with the financial system.
And now he's really echoing a lot of these big signals that we see coming. Just last week on October 31st, the Fed injected $29.4 billion dollar into the economy, which is the largest single day injection in over five years. In addition to that, the US bank reserves crashed to $2.8 trillion, which is a 4-year low, dropping $102 billion in recent weeks.
That's the sharpest decline we've seen since 2020. Steve, I'll tell you. Um, one thing that I've noticed is I'm not seeing this on Fox News or Bloomberg or really any of the major TV networks. Why are we not hearing about these types of numbers? Yeah, I I think that they obviously want to keep a lot of these big signals quiet, but we're seeing a number of them.
And it's not just those. You're seeing that the government shutdown, this is the longest one we've seen in uh over 35 days so far. I mean, this is the longest one we've seen in history. Yes, Stephen. What about the Fed balance runoff? Yeah, well, again, that's going to end. The balance sheet runoff is going to end on December 1st, and that's despite Chairman Powell's very hawkish view on the economy.
In addition to that, the Fed's emergency repo operations revealing a critical problems in this economy as well. So, there's any number of things that are happening right now. Good point, Steve. And one of the things that this also kind of leads us to look at is once again the Treasury market which is something I've been very concerned about and the show all of us have been concerned about for some time.
Not a lot of people want to talk about the fact that the US Treasury market is it appears to be in a very bad position. One of the reasons why is because just recently, like you see, you're seeing central banks, you're seeing nations, you're seeing trading partners willing to swap treasuries for other assets, kind of like gold.
One of the reasons why we saw gold become a tier one asset again. Now, think about this for a second. If we all of a sudden have a Treasury crisis, that means yields will be affected, interest rates get affected from there. That's exactly right, Eric. And think about what happened immediately after that injection of money.
The 13-week Treasury bill yield dropped from 3.76% to 3.72% immediately after this injection of money. This is something that people need to keep their eye on right now because it affects everybody. So why does Ray Dallio recommend gold? I mean, let's start with this. It's real money. It's got nobody else's counterparty risk.
Governments always go to gold when things look very bleak. If we're looking at it right now, governments are now holding more more gold than US dollar reserves for the first time since 1996. Gold is a hedge against uncertainty, against foreign currency devaluations, and against inflation. And if we know right now of anything, certainly we're facing times where there's going to be significant inflation.
And that's why governments are going right now to gold as a way to be able to protect themselves against the falling purchasing power. And that's exactly what our people should be doing as well. So, how does what Dalio is saying right now make sense? Well, let's just kind of look at the facts. I mean, you've got a a Fed right now that just threw bill $30 billion into the banking sector because of liquidity issues with with that.
You have a 35day shutdown right now with government. Uh they cannot come to an agreement because they want billions and billions and billions of dollars to put all these different places and nobody seems to have any concern about the deficit. We said last week we went from 37 trillion to 38 trillion in two months.
But that is no politician's concern whatsoever. Nor does it come up in the Fed meetings. Not to mention, we have a 123:1 debt to GDP ratio right now. That is staggering. That's something that I think no one should overlook. It matters. People tell you it doesn't matter. It does matter. It absolutely can crush the dollar if that continues to go in the direction that it goes.
Finally, when you look at what's going on with the hawkish talk that came from PAL back during the Fed meeting just a few days ago versus the dovish actions that we're seeing with the injection of the Fed putting that money back into the banking sector se sector because of liquidity problems. I mean, these things are contradictory to each other, and it's just something that it it screams you need more gold.
Now, with that, I think Steve, if you could close this out, I'd appreciate that. Remember to click down below for the rookie mistakes guide, and we'll see you next time on the Gold Spot. If you enjoyed today's Gold Spot, like or subscribe to both our YouTube and Rumble channels. Also, comment below if you have any questions or if you'd like to hear us talk about a specific topic in a future video.
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