When the craziness in the repo market started the Fed said it's a “temporary glitch” now that glitch has turned into a full-blown repo madness nightmare that looks like it's going to be permanent.
The repo market is the plumbing of the entire financial system.
If the repo market freezes the whole entire monetary system collapses.
Central to the repo market is cash and for some reason, the big banks aren't lending the cash they have. This has prompted the Fed to stay in the repo market for the foreseeable future.
It's impossible to know exactly why the system isn't working but it's obvious the repo market is telling us something is horribly wrong with the entire financial system.
If YOU are interested in the future of the US economy THIS IS A MUST WATCH VIDEO!
Everyone is talking about the repo market but I think they're all missing the point. They look at the reserves and excess reserves in relation to where they've been over the last few years.
But the repo market has been around for a lot longer. If you look at reserves in the system the last time the fed funds rate was at 1.75% the entire excess reserves of the banking system were 1.3 billion. Now it's 1.3 TRILLION!!
In this repo market video I'll discuss the following:
1. Overview of the repo market system.
2. Signs of problems in the repo market.
3. Proof the repo market and the entire system is BROKEN!
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