Wake Of The (Fed) Flood! Fed Balance Sheet Breaks $8 TRILLION Barrier As Reverse Repos Skyrocket (Despite Rise In Repo Rate)

Confounded Interest ^ | 06/18/2021 | Anthony B. Sanders

[Browns Ultra Fan]

We are in the wake of The Fed flood. And its not a half-step, but a flown-blown boogie.

The Fed sold a record $756 billion in Treasury securities this morning in exchange for cash via overnight “reverse repos.” This was up by a stunning 45% from yesterday’s operations of $521 billion. There were 68 counterparties involved. Yesterday’s overnight reverse repos had matured and unwound this morning, to be more than replaced by today’s Fed Flood. The result? The Fed’s balance sheet tops $8 trillion!

This is truly The Wake of the Fed Flood!

[Browns Ultra Fan]

The Fed can't stop the fire they created along with Biden's spending lunacy.

[cuban leaf]

Meh. I’ll be impressed when it breaks quadrillion.

And I’ll cheer when it hits bazillion!

[Dilbert San Diego]

What does it mean? I recall from an accounting class , that the balance sheet must be in balance, so that assets minus liabilities equals net worth.

So are we saying that the Fed has loaned the federal government a record amount? Does the Fed have accounts receivable from the federal government of a record trillions of dollars?

[Bishop_Malachi]

And I’ll cheer when it hits bazillion!

________________________________________________

Yep...me too. It will either prove that the hand-wringing over national debt is a issue that Conservatives should abandon or it will blow the economy to pieces and prompt a long-overdue restructuring of our nation.

[Nateman]

It means money created out of thin air. They get to spend it and you get Inflation. From the amount of money I've seen pumped out the dollar is about to have the worst Inflation in living history.

The elites are trying to destroy the economy before they build it up again under socialism. The Communist Revolution continues. Never thought I'd find myself in the middle of one but I'm not going to pretend it can't happen here.

[Sequoyah101]

What is a reverse repo?

I never heard of it and yet the phrase is thrown around like it is common knowledge.

[DesertRhino]

That’s where they deliver the car back to your house.

[Little Ray]

I don't understand it either, but here ya go:

A reverse repurchase agreement conducted by the Desk, also called a “reverse repo” or “RRP,” is a transaction in which the Desk 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.

Repo Rate is the interest rate at which a Reserve Bank lends money to commercial banks, against collateral, i.e. government bonds, for a short term. On the contrary, Reverse Repo Rate refers to the interest rate which the RB pays to the commercial bank when they park their surplus money with the RB.

[Tell It Right]

"Does the Fed have accounts receivable from the federal government of a record trillions of dollars?"

Yes. The treasuries are IOU's from the U.S. Treasury department. Forget the mess about China being the #1 holder of U.S. debt. It's really mainly the federal govt owing itself. For decades the #1 owner of treasury debt was the Social Security trust fund. Recently the Federal Reserve passed the SS trust fund as the #1 holder of U.S. treasuries. This is during their "not QE" period (when they claimed that what they were doing is not quantitative easing, but it really is).