Finance and banking gurus, economic hobbyists, crypto autists... what is the fed doing? *see pic*

Harbor

Harbor

Location
Stockton
That’s quantitative easing, money printing and fed bond repurchasing to flood the market with cash during the pandemic…(also kept interest rates near zero)….now they are taking us into quantitative tightening to try and control the side effect of said activity which is (inflation), which can morph into hyper inflation and currency devaluation like Venezuela has….or worse, devaluation of the dollar and loss of US dollars reserve currency status, ( oil, gas, commodities and more or all traded in US dollars throughout the world, which makes these purchases cheaper for us in the USA.. So the bond repurchasing by the fed and money printing are being tapered back fast, coupled with large interest rate increases at each fed meeting…. The side effects of quantitative tightening is risk of recession and stock market crash….

The theory is, take money out of the market and raise the cost to barrow (no more cheap money) which will effects the ability to spend money, so people and companies will buy less and prices (inflation) fall…..

We should go back to the gold standard
 
S

sturat

Location
WA state
Harbor said:
That’s quantitative easing, money printing and fed bond repurchasing to flood the market with cash during the pandemic…(also kept interest rates near zero)….now they are taking us into quantitative tightening to try and control the side effect of said activity which is (inflation), which can morph into hyper inflation and currency devaluation like Venezuela has….or worse, devaluation of the dollar and loss of US dollars reserve currency status, ( oil, gas, commodities and more or all traded in US dollars throughout the world, which makes these purchases cheaper for us in the USA.. So the bond repurchasing by the fed and money printing are being tapered back fast, coupled with large interest rate increases at each fed meeting…. The side effects of quantitative tightening is risk of recession and stock market crash….

The theory is, take money out of the market and raise the cost to barrow (no more cheap money) which will effects the ability to spend money, so people and companies will buy less and prices (inflation) fall…..

We should go back to the gold standard
Click to expand...



"
The Fed might finally be waking up to the fact that the monetary system is not what it was 70 years ago. Bank reserves do nothing. The monetary system needs collateral. The best of the best collateral is US t-bills. US notes then bonds are slightly worse. There are also corporate bonds, junk corporates, mortgage backed securities, and a whole bunch of other things.

The repo market is a place where Bank A can say "hey, i have a bill. i'll trade this to you overnight for the equivalent cash value plus a small haircut." But, thanks to a cool little thing called rehypothecation, Bank A can take that very same bill and trade it to Bank C for cash as well, even though they already pledged it to Bank B. Official literature says the average piece of collateral gets pledged about 8 times. If you're close friends with bankers working the repo desk or if you get one drunk and feed his ego, he'll tell you it's actually closer to 30 or 40 times.

Unfortunately for banks and the Fed, you cannot (easily and/or legally) repledge/rehypothecate collateral taken from the Fed."



how accurate do you feel this statement is?
 
kevbo

kevbo

Location
dfw
8X or 40X, its too much leverage and it doesn't matter. The crisis begins shortly after the LAST buyer has made his purchase.
 
Harbor

Harbor

Location
Stockton
sturat said:
"
The Fed might finally be waking up to the fact that the monetary system is not what it was 70 years ago. Bank reserves do nothing. The monetary system needs collateral. The best of the best collateral is US t-bills. US notes then bonds are slightly worse. There are also corporate bonds, junk corporates, mortgage backed securities, and a whole bunch of other things.

The repo market is a place where Bank A can say "hey, i have a bill. i'll trade this to you overnight for the equivalent cash value plus a small haircut." But, thanks to a cool little thing called rehypothecation, Bank A can take that very same bill and trade it to Bank C for cash as well, even though they already pledged it to Bank B. Official literature says the average piece of collateral gets pledged about 8 times. If you're close friends with bankers working the repo desk or if you get one drunk and feed his ego, he'll tell you it's actually closer to 30 or 40 times.

Unfortunately for banks and the Fed, you cannot (easily and/or legally) repledge/rehypothecate collateral taken from the Fed."



how accurate do you feel this statement is?
Click to expand...

Everything in this thread is pretty spot on..

^^^ reminds me of repackaging Collateralized mortgage backed securities, slapping AAA rating on them, then selling to municipalities and school pension funds….

Your right, the Monetary system is not what it used to be
 
E350

E350

Location
Sacramento Delta
The Worldwide banking system is causing the banking problem which they will solve with Central Bank Digital Currency:


Watch additional videos by Catherine Austin Fitts. Former advisor to Globalist and President George Bush, Sr.
 
S

sturat

Location
WA state
Harbor said:
Everything in this thread is pretty spot on..

^^^ reminds me of repackaging Collateralized mortgage backed securities, slapping AAA rating on them, then selling to municipalities and school pension funds….

Your right, the Monetary system is not what it used to be
Click to expand...
I can't wait for the imminent collapse of this system.
 
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