Quote:
Originally Posted by jyl
Usage of RRP is currently almost entirely by money market funds.
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Excess money mkt funds...
It doesn't matter which acct the money is coming from... what matters is the escalating AMOUNT.. SUDDENLY!!!!! they have.. an excess of a few $$$ that have to be laid off...
I suppose some might say that a Trillion is a trivial amount of money...
At the beginning of May 200 to 240B...end of June 1T..
The
danger in this is that the world is coughing up $$$$$$$ and repatriating them back into the system? Which as pointed out by Piscov Ascoy can cause the FED some problems in managing the US macro economy..(Being Money Mkt funds would indicate an aggregate of smaller players rather than big institutions)?
As Drunkenmiller pointed out in 2020 instead of the usual pattern of having an inflow of money into Treasuries during a crisis as a "safe haven" there was an outflow. This is a clear sea change in perception about the safe haven status of the USD.. The USA is now in the same boat as Argentina..
This GLOBAL change in perception about the USD is the point I am making, have been making pointedly since early 2013..It HAS NOW COME TO PASS...it is another step further on the road/process to he11. A sign post that I said would happen if the US?FEd continued it's current policies..
An another thought is if so much money is in Money Mkt funds it is not being utilized in the economy..but is being side lined..which should effect the Velocity of Money.
Then we have the US govt and it's spending regime...WITH INCREASING DEFICIT SPENDING...(just put another Trillion on the card for infrastructure..what the he11 this is America for christs sake..we are rich and can afford it). But I digress a bit..the point here is the position it leaves the FED is in.
.they have no choice but CONTINUE QEing... the US Bond mkt is already saturated with US debt instruments..leaving the FED as being the BUYER OF LAST RESORT..
The paradox is, on one hand the FED has to deal with the EXCESS of money in the system while being forced to continue printing more of it.
Something is wrong here...the economy is moribund..and the dance that the US govt and FED has been doing to plaster it over isn't working so well anymo... it has become dysfunctional. It is just one more sign post/milestone on the road to he11.
The trajectory of all of this has been apparent for a VERY VERY LONG TIME...the smell of this to the discerning indivdual was noticeable back in 1980. AND certainly the road map was published in early 2009.. You already know what I think the terminus is going to be..
The thing that is perplexing to me is that you Boyz..don't take this stuff to heart, because your actions and discussions continue to be it's going to be bizness as usual..as if it will never change...my solace in this is Lemming wouldn't be Lemmings if they could take it to heart and change course..In that way the Lemmings course of action and outcome have been predetermined.