Quick Note: 'Dollar Shortage' IS A LIE
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2019-09-18 11:59 by Karl Denninger
in Federal Government , 301 references Ignore this thread
Quick Note: 'Dollar Shortage' IS A LIE
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Folks, the claim being run about a "dollar shortage" leading to the repo market spasms is a bald-faced lie and anyone running that crap is committing a fraud upon the public -- the purpose of which should be exposed and then they should be indicted, prosecuted, jailed until dead and then their remains used for fishfood.

Why?  Because at its root it is quite obvious that someone -- or some group of someones -- is running an extortion scheme.

It is a fact that there is well north of a trillion dollars at the Fed in the form of excess reserves.  These are funds that the banks can choose to pull and use for repos, lending or whatever -- they just choose not to.

To the extent that The Fed has encouraged that and, instead of slamming by name the firms that created that spike the last couple of days and nailing them with regulatory sanction they instead launched two repos is outrageous.

There is no dollar "shortage" when over a trillion worth of excess dollars are being intentionally stuffed into The Fed for the purpose of earning interest from The Fed on same (at 2.1%) when The Fed could have simply whacked that rate to zero to make that game instantly uneconomic.

Don't believe the flat out bullcrap coming from certain corners of the Internet and other media -- when there's a trillion dollars laying around on purpose there is no shortage of dollars because "someone" wants a measly $50 or $75 billion on an overnight basis.

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