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Home Daily Digests Fed’s QT: Drying Up Liquidity and Witty Repurchase Tricks

Fed’s QT: Drying Up Liquidity and Witty Repurchase Tricks

From the Fed’s liquidity juggling act to the Treasury’s ‘financial surveillance’, the economic landscape is as complex as it is controversial. Add in peak oil predictions and border tensions, and you’ve got a news cocktail worth sipping.

user profile picture Ivor Jan 19, 2024
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DISCLAIMER: The following content does not reflect the opinions of Peak Prosperity, but is rather a summarization of content that has caught the interest of members of the community.

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The Federal Reserve Bank of New York has been conducting temporary open market operations, involving short-term repurchase and reverse repurchase agreements. These operations are designed to influence day-to-day trading in the federal funds market and manage reserves available to the banking system. The Overnight Reverse Repurchase Agreements, in particular, have seen a decrease of $1.78 trillion since September 2022 due to Quantitative Tightening (QT), which drains liquidity from the system. The Fed’s assets have also decreased by nearly $1.3 trillion as a result of QT. However, the Fed has reintroduced the Standing Repo Facility (SRF) to provide liquidity to the market and banking system without adding to the balance sheet.

In the realm of economic theory, a speaker has argued that the Western world is in danger due to a shift from the model of freedom to collectivism. They emphasize the importance of economic freedom, private property rights, and free markets in promoting economic growth and ending world poverty. They criticize social justice as unjust and coercive, and warn against the influence of socialism, radical feminism, and environmentalism.

Meanwhile, the Treasury Department has reportedly asked banks to monitor customers’ transactions for signs of “extremism” following the events of January 6, 2021. This has raised concerns about the violation of civil liberties, with House Judiciary Committee Chairman Rep. Jim Jordan referring to it as “financial surveillance” and expressing concerns about the violation of privacy without a warrant or legal process.

In the energy sector, Steve St Angelo has discussed the concept of peak oil and its impact on the economy. He argues that peak cheap oil is not a myth and that conventional oil production peaked in 2006. He warns that as oil production declines, the economy will be affected, particularly the highly leveraged and overvalued financial assets. He suggests that investors should consider investing in real assets like precious metals to protect their wealth.

In the political sphere, tensions have escalated between the federal government and the state of Texas over border control. The federal government has warned the Texas National Guard to cease its efforts to block Border Patrol’s access in and around the Shelby Park area. Texas has responded by saying it will “not surrender to Biden’s destructive open-border policies.” This has led to numerous Republican governors in other states, especially the south, sending resources to Texas immediately. The year 2023 marked the first time in modern US history that the number of migrants far outpaced the number of births in America. The Democrats admitted the open border policy was a deliberate attempt to flood the nation with people who would vote for socialistic policies as they usher in the New World Order.

Sources

Fed’s Quantitative Tightening Drains Liquidity, RRPs and Reserves Return to Normal Levels

Overnight Reverse Repos” (ON RRPs), where money market funds park their extra cash to earn 5.3%, have plunged by $1.78 trillion from the peak in September 2022, to just $590 billion, as QT is draining liquidity from the system.

Source | Submitted by rhollenb

Texas National Guard and Federal Government Clash Over Border Control

The federal government warned the Texas National Guard to 'cease and desist its efforts to block Border Patrol’s access in and around the Shelby Park area and remove all barriers to access to the U.S.-Mexico border.'

Source | Submitted by bcoop

Federal Reserve Faces Uncertainty as Market Expects Rate Cuts at Every Meeting in 2024

The market expects the Fed to cut rates at every meeting this year.

Source | Submitted by rhollenb

Treasury Department Requests Banks to Monitor Customers’ Transactions for Signs of “Extremism”

“This kind of pervasive financial surveillance, carried out in coordination with and at the request of federal law enforcement, into Americans’ private transactions is alarming and raises serious doubts about FinCEN’s respect for fundamental civil liberties.”

Source | Submitted by Mysterymet

Silver Demand Soaring as Investment Demand Ramps Up, Says Independent Researcher Steve St Angelo

There's a lot of demand now coming in for silver, and we haven't even talked about the major impact which is going to be investment demand in the future. So there's a lot of perfect storms for silver in the future.

Source | Submitted by Slin

“The West in Danger: Leaders Abandoning Freedom for Collectivism, Warns Argentine Speaker”

The conclusion is obvious: far from being the cause of our problems, free trade capitalism as an economic system is the only instrument we have to end hunger, poverty, and extreme poverty across our planet. The empirical evidence is unquestionable.

Source | Submitted by Slin

“Comprehensive Analysis: US Debt, Federal Reserve, Global Trade Impact, Bitcoin Volatility, and Renewable Energy Transition”

https://www.youtube.com/watch?v=70gP25Ac11k&t=7s

Source | Submitted by rhollenb

Federal Reserve Bank of New York Conducts Temporary Open Market Operations with Reverse Repurchase Agreements

A reverse repurchase agreement (known as reverse repo or RRP) is a transaction in which the New York Fed under the authorization and direction of the Federal Open Market Committee sells a security to an eligible counterparty with an agreement to repurchase that same security at a specified price at a specific time in the future.

Source | Submitted by rhollenb

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