The Repo Market is telling us something is VERY wrong with the system
The repo market used to function easily with 10 billion in excess reserves, now it requires over 1.5 trillion?
Something must be very wrong. Up until now, you've been told the issues in the repo market have to do with a bank bailout, taxes, and regulations, or bad collateral but there could be much more to the story.
The entire repo market disaster could have been caused by the treasury department! That's right.
Some experts are saying the treasury is not responsible for the majority of the cash going into the repo market.
If they want to boost the stock market they can through injecting more liquidity into the repo market for hedge funds to use to buy stocks.
In this repo market video I'll discuss:
- How the Feds deal with the treasury, called the SFP changed the repo market forever.
- How the treasury can now control the number of reserves used for the repo market.
- How the treasury has now weaponized the TGA and the repo market.