US Fed to Print $425B for New Year’s — 3 Times Bitcoin’s Market Cap

[bone]

It’s entirely possible that JPM is either hoarding Repo agreements on the secondary market or they’re calling Repo agreements on the secondary market. Which would be a dick move that would require the Fed to issue more Repos on the open market - in any event, those Repos are collateralized at 1:1 with US Sovereign paper.

The Fed isn’t incurring more debt by issuing more Repo Agreements. It’s a literal swap.

To me, that pretty explains why JPMs recent public comments and criticisms of Basel III (right or wrong) are merely red-herrings.

 

[Sig]

Gold-backed currency may seem like madness to you, but this seems like madness to me:View attachment 215294

If backing currency with an arbitrary mineral did anything to change that graph, which it wouldn't given that the value assigned to the arbitrary mineral is itself arbitrary along with the supply of that mineral, then we could perhaps begin a conversation about why you feel that graph is showing something inherently bad.

 

[bone]

Amen, brother. Japan has twice the debt to GDP ratio as the US, and yet the Yen and the JGB are still worth something.

And yet Japan is the third-largest economy in the world by nominal GDP and the fourth-largest by purchasing power parity (PPP) and is the world's second largest developed economy.

If backing currency with an arbitrary mineral did anything to change that graph, which it wouldn't given that the value assigned to the arbitrary mineral is itself arbitrary along with the supply of that mineral, then we could perhaps begin a conversation about why you feel that graph is showing something inherently bad.

 

[tiddlywinks]

The Fed isn’t incurring more debt by issuing more Repo Agreements. It’s a literal swap.

I completely agree... this is NOT QE: it is NOT an effort to "stimulate" the economy.

It is an atttempt to PREVENT short-term US rates from rising, which begs the question, why is there a loss of confidence between banks that is demanding higher US interest rates? That is the problem I see. It will be answered given time. It is something macro.

 

[bone]

There is nothing nefarious about Repo Agreements in isolation - in fact, it’s one of the most useful functions of the Fed.

The Treasury has been buying something like $40B + per month in Treasuries on the secondary market. And why wouldn’t they roll coupons? Why wouldn’t they exchange higher paying coupons for lower paying coupons? Makes perfect sense. That’s like refinancing a mortgage. Again and again.

It is an attempt to PREVENT short-term US rates from rising, which begs the question, why is there a loss of confidence between banks that is demanding higher US interest rates?

 

[tiddlywinks]

I didn't say or suggest there is anything "nefarious" going on.

But I will point out your explanation is flawed in that "rolling" coupons does not "extinguish" debt. And not to be forgotten, Fed's Repo is ultra-short-term. The Fed does not keep the collateral when the repo term expires: the repo is reversed. The secondary market activity is unrelated in that way. Plus the Fed repo is not meant as "the" primary overnight funding source... Fed Funds rate, bank to bank overnight lending is!

 

[zdreg]

Call it by its true name. It is helicopter money.

 

[ET180]

it sounds cool to yell 'abolish the Fed'... but be careful... at least with the Fed you have food on the supermarket shelves.

US Federal Reserve was founded in 1913. Pretty sure stores had food on the shelves before they came along.

If backing currency with an arbitrary mineral did anything to change that graph, which it wouldn't given that the value assigned to the arbitrary mineral is itself arbitrary along with the supply of that mineral, then we could perhaps begin a conversation about why you feel that graph is showing something inherently bad.

Talk to the central banks and tell them to stop holding arbitrary minerals of questionable value. You know that there are practical uses for gold and its value is determined everyday in the open market. If you see nothing wrong with the previous graph, then tell the IRS to stop collecting taxes. The government can just issue debt and with all the money saved on taxes, that would be a huge boost to the economy.

 

[guru]

I don’t understand enough of this but saw various alarmist articles and people talking about how the market shot up recently because of these repos. A top VIX trader I follow and who made shitload of money selling VIX puts is now afraid to sell VIX puts because of these repos.
Could someone please confirm/deny whether the recent stock market surge had anything to do with these repos. And if so, would the upcoming/planned fed activity have similar effect?

 

[dozu888]

US Federal Reserve was founded in 1913. Pretty sure stores had food on the shelves before they came along.



Talk to the central banks and tell them to stop holding arbitrary minerals of questionable value. You know that there are practical uses for gold and its value is determined everyday in the open market. If you see nothing wrong with the previous graph, then tell the IRS to stop collecting taxes. The government can just issue debt and with all the money saved on taxes, that would be a huge boost to the economy.

- The Federal Reserve System (also known as the Federal Reserve or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to the desire for central control of the monetary system in order to alleviate financial crises.[list 1] Over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System.[5][10][11]

the above from wiki... it was born after the fail of decentralized banks.

- the production/consumption of gold has been mostly balanced thru the years/decades.. the US is not the only central bank holding gold.. this appears to be more of a psychological factor as there are still plenty of people thinking only gold is real money.. so having gold reserve does help on confidence.

- some government functions are still essential such as military, so tax is necessary to run it. The argument really has been big gov vs. small gov... Trump's tax cut and reduction in federal staff goes along your argument.