🟢 [E6135] US has officially declared 'Great Power Competition' with China and Russia, with FFTT noting the US 'now acknowledges and accepts the relationship with the PRC as the CCP has always framed it internally: one of great power competition.' FFTT argues the US plans to 'spend Russia and China into oblivion,' historically an extremely expensive strategy requiring massive deficit spending and continued Fed monetization.

🟢 [E6137] FFTT argues SLR rule suspension structurally weakens the dollar by allowing banks to shift from providing credit to 'the US government OR households/businesses' to 'the US government AND households/businesses,' creating structural USD liquidity increase. However, short-term USD strength risk exists if Fed/banks fail to buy enough Treasuries, which could trigger sharp USD surge and risk-off episode.

🟢 [E6134] FFTT argues structural pressure exists for continued Fed balance sheet expansion as Treasury issuance outpaces Fed purchases, creating liquidity stress. If Fed and banks fail to buy enough Treasuries, USD could surge sharply triggering risk-off. Government borrowing could overwhelm system capacity and crowd out private securities issuers. Yield curve control implementation expected as Fed caps Treasury yields.

🟢 [E6139] FFTT's framework implies inflationary outcomes as structural Fed balance sheet expansion to finance Great Power Competition deficits favors real assets (gold, gold miners, equities) over nominal assets (bonds). Yield curve control capping bond returns while monetary base expands represents classic financial repression that erodes purchasing power of fixed-income holders.

🟢 [E6136] FFTT favors equities over bonds in an environment of structural Fed balance sheet expansion. Net capital gains and IRA distributions represent 200% of annual growth in personal consumption expenditures, making stock market performance mathematically essential for consumer spending growth and economic recovery. Critical risk flagged: if unemployment benefits not extended by August 2020, personal income could collapse.

🟢 [E6133] FFTT is structurally bullish gold and gold miners over bonds, arguing the Fed will be forced to continue expanding its balance sheet to finance 'Great Power Competition' with China and Russia. Yield curve control will cap bond returns while structural monetary expansion favors real assets like gold. DOJ investigations into precious metals manipulation at JPMorgan, HSBC, and Scotiabank on COMEX noted as risk to gold trading infrastructure.

🟢 [E6132] FFTT argues Treasury issuance is exceeding Fed balance sheet growth, forcing continued monetary accommodation. Stan Druckenmiller noted the net difference between Treasury issuance and Fed purchases goes to zero in May 2020, with net borrowing exceeding Fed purchases in June 2020. SLR rule suspension allows banks to hold unlimited Treasuries alongside private credit, representing structural USD liquidity expansion.

🟢 [E6140] SLR (Supplementary Leverage Ratio) rule suspension is a critical deregulatory move allowing banks to hold unlimited Treasuries without capital charges alongside private credit. FFTT frames this as transformative for banking sector capacity, enabling banks to finance both government and private sector simultaneously rather than choosing between them, structurally increasing system-wide liquidity.

🟢 [E6138] FFTT frames the current macro regime as one where Great Power Competition necessitates massive deficit spending, financed by Fed monetization and SLR suspension allowing banks unlimited Treasury holdings. This represents a structural shift from normal monetary policy to wartime-style fiscal dominance, using the 'Flags of Our Fathers' analogy: 'If we don't raise $14 billion...this war is over by the end of the month.'

💬 [E6141] FFTT notes US has officially declared Great Power Competition with China, with the US planning to 'spend Russia and China into oblivion.' This frames China as a strategic adversary requiring massive US defense and economic spending, though the note does not directly address Chinese equity investment opportunities.