Tag Archives: FOMC interest rate hikes

Fed Reverse Repos Reveal Big Cracks In The Financial System

Since the Fed’s QE program largely tapered at the end of 2014 (note:  the Fed still used interest on its mortgage holdings to buy more mortgages), the size and volatility of the Federal Reserves reverse repo operations with banks – especially foreign banks – has been continuously increasing:

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The most likely explanation for this is growing liquidity problems in the western banking system connected to increasing instability in OTC derivatives. While all fingers point to Deutche Bank, DB is just one player in large game in which every player is inextricably connected.  But the eventual derivatives financial nuclear melt-down will probably be triggered by DB, and the fact that the ECB enabled Deutsche Bank to cheat on the BIS-mandated bank stress tests reinforces this view:  ECB Allow DB To Cheat.

The scale and severity of this problem is going to explode now that the U.S./western housing and auto loan bubbles are beginning to pop.

In today’s Shadow of Truth episode, we discuss some possible meanings embedded in the two graphs above plus a couple other topics not covered by the mainstream financial media propaganda:

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