Repo Markets in Panic: Summary

Repo Markets in Panic The Stage of self-destruction The Credit Cycle The function of the Repo Market It is getting very ugly for the...

Repo Markets in Panic

The Stage of self-destruction


The Credit Cycle


The function of the Repo Market


It is getting very ugly for the big banks


Scrambling for liquidity scarcity that cannot be resolved


Market melt-up and meltdown


Summary


Source: Final Wakeup Call




The end of existing global financial debt-money system

Reflation is a fiscal or monetary policy, designed to expand a country’s output and curb the effects of deflation. This now is going in reverse, changing in the opposite direction. In fact, debt reflation in the opposite direction is deflation of debt, making the economic situation worse, leading to contraction, propelling the economy into a collapse.

Less debt means less debt-money or credit-money in circulation, which are the same for a better understanding. Therefore, there is less money in circulation, meaning lack of available money. In other words, it is the end of the existing global financial debt-money system.

When a central bank economy is contracting it automatically creates a shortage of new debt, thus available debt-money too. That – and not a lack of any reform is triggering the Repo crisis. Any financial system based on debt-money, like the current will blow up anyway. No paper-money system has ever survived a full credit cycle, because paper money – is a form of primitive, credit/debt-backed money – without any discipline it is unlimited.

Clearly the Rothschild owned Central Bank and the Deep State mafia are getting scared as they are running out of ammunition. They weren’t able to create WW3 necessary for a reset of this corrupt system. The fact that the Rothschild controlled Central Bank of Japan, and the ECB in Europe were forced to resort to negative interest rates, proves their fake fiat monies are worth less than nothing. As an unwanted consequence, the US Federal Reserve Board has been forced to do the same thing. Reaching a situation; wherein more money has to be put in the banks, although that money is vanishing rapidly – because of the debt deflation – increasing the need for more fresh money, and that is exactly the root of the Repo market crisis, which started in September 2019.



The Stage of self-destruction

For at least the past one hundred-ten-years, the monetary system has been manipulated, bringing the world to its knees through financial engineering that should have been alarming on its own for every well-educated economist. But the majority of economists have been masterfully kept in the dark about the hidden agenda, despite the occasional ringing of bells by people who had gained insight into the deception.

Extensive in-depth research and analyses, has learned the whole monetary system – by design – is intentionally destructing itself. The excessive printing of fiat-debt-money has arrived in its final ‘reflation’ stage of self-destruction, because the debt in the world has grown so excessive that the credit-system has gone into reverse mode, as now the paradox occurs; there is no liquidity left to pay back the debt.

Reflation is no longer possible and the deflationists are being proven correct. They are correct in regards to a credit system working in reverse with a negative feedback loop, stoking a deflationary death spiral.

There is just one small problem; what will happen to the currencies of these central bank issuers, who apparently also are caught up in the negative feedback loop? – This is the main and most pressing financial question that has ever been faced. Will the fiat currencies survive and thrive during the deflation or will these be seen by the masses for what these are, IOU’s of bankrupt issuers at the very centre of the credit crisis quagmire? If you answer this question incorrectly, you have finished your own financial destiny.

The key question is against what assets will these fiat currencies “deflate”? The answer of course is as it has always been; “gold”. – Nevertheless, the pundits will have you believe gold isn’t good money. But look back at 1934 when “gold was devalued versus the dollar″, it shows now clearly that it was quite the opposite; The “dollar” since that time has been devalued by 98%, and proven not being the best investment since the 1930’. They are cheaters!



The Credit Cycle

With real money, the more you have, the richer you are. But as the quantity of debt money increases, the economy becomes more and more vulnerable to a turn in the credit cycle. The foundation of any stable currency is valuable reserves. Especially in today’s uncertain times, it is for the future of any currency of crucial importance that the gold reserves are taken care of. Hence, the national wealth can be secured even in tough times.

A credit cycle describes the phases of access to credit by borrowers. Credit cycles first go through periods in which funds are relatively easy to borrow; these periods are characterised by lower interest rates, lowered lending requirements, and an increase in the amount of available credit, which stimulates a general expansion of economic activity. These periods are followed by a credit contraction in the availability of funds.

Most people are being brainwashed and kept in the illusion that debt is good and is unquestionably money with value, against which you can buy valuables, which of course isn’t true. It is time to start educating yourselves to discover that all that has been taught is wrong. People have to learn to change their thinking to see things as they really are. A good guide is THE GREAT AWAKENING, part 1 and part 2 that explains and corrects the wrongs people have become accustomed to living with.

Once your eyes are opened and you are awakening to the Truth, you’ll notice the world with regard to all aspects of life is on course of changing. People that are educated about this will understand and enjoy the upcoming historical changes, that will liberate all of us from tens of thousands of years of enforced debt enslavement.



The function of the Repo Market

The Repo market is the financial funding for the world for short term loans, in which billions of dollars in daily operations are exchanged. Where one party lends out cash in exchange for a roughly equivalent value of securities, usually Treasury notes. This market allows – mostly banking – institutions that own lots of securities to gain cash when they need it at cheap rates. The borrower of the cash agrees to repurchase the securities it has loaned as collateral at a later date, often as soon as the next day.

Typically, what funds these loans are the money market accounts that were told being very safe. But, as the quantity of debt increases, the quality decreases. And that’s what’s happening with debt today. There’s a very simple reason why the credit cycle has turned. Because the economic cycle has turned too. The back wind that was working for the markets from 2009 through mid-2015, has turned in a head wind and is now working against the central banks. For the reason that unsecured loans swamp the banking industry.

The funds rate, which is the amount that banks charge each other for overnight loans, is the main way the central bank manages short-term interest rates and can be influenced by moves in the repo rate. But in such periods, banks don’t trust each other, no bank is willing to lend. Which is the case nowadays, and the only one left that must lend is the central bank, by printing more money.



It is getting very ugly for the big banks

Lies, money, corruption, greed, and human madness. The scale of all made mistakes is massive. Big enough to cripple everyone’s financial well-being and eventually the financial stability of the whole world. It is getting very ugly for the big banks, as followers of the Repo market have become aware. The price of many bank shares are in clear downtrends, particularly at European banks. Many of them are being swamped by unsecured loans and derivatives that will never be repaid and will therefore have to be written-off as total losses. Desperation is rising as the tide is turning inevitably against the Deep State establishment, with economies weakening noticeably around the globe. Causing the financial structure getting more and more fragile by the day.

To demonstrate the severity of today’s repo crisis; the Federal Reserve admitted it had pumped more than $ 6 Trillion into the system in the recent six-week period. – To be compared with the financial collapse between December 2007 and July, 2010 – which has been the worst financial crisis since the Great Depression. During that period, the Fed funnelled a total of $29 Trillion in cumulative loans to Wall Street banks, their trading houses and their foreign derivative counter parties. – At the pace it is currently going, it would eclipse that $29 trillion within a couple of month from now.

As of yet, there is no discernible financial collapse occurring on Wall Street. In fact, the Dow Jones Industrial Average and Standard and Poor’s 500 Index achieved multiple record highs in the month of December 2019 – making it appear that the Fed’s money to these trading houses is going straight into the stock market. That is about as far from the Federal Reserve’s monetary policy mandate as it can get and yet there has been no outcry from anyone in the mainstream media, nor any public announcement of an upcoming Congressional investigation.



Scrambling for liquidity scarcity that cannot be resolved

Let’s observe more closely; News that would have been considered unthinkable a few years ago has now become routine. Because, the yield on 10-year German bunds – the European equivalent of 10-year T-Bond in the U.S – plunged to a record low of 0.033%. In other words, the benchmark sovereign debt of one of the world’s most important economies yields less than one-half of one percent. And analysts believe it could hit 0% as early as the coming weeks.

Of course, European sovereign yields are plunging thanks to the ECB’s massive easing programs. The quantitative easing program has purchased more than 1 Trillion euros of bonds so far. The ECB’s easing program, on a relative basis, is now officially bigger than those of the U.S. or Japan. And, it’s about to get even bigger and worse.

Subsequent, the repo market is seriously in panic. Almost every repro operation is oversubscribed dealers are scrambling for liquidity, while the central bank is submitting billions in securities, which is ominous because of the liquidity shortage into year-end as was expected, and first has justified the barrage of term repos. When the liquidity shortage was supposed to normalise after the new year. Alas, that appears not to have happened.

Worse, any attempts to drain liquidity from the repo market, or generally slow down the shrinkage of the balance sheet, will be met with failure. It is also another indication that the repo market at this point holds the Fed hostage, with Powell trapped in not only injecting liquidity via QE4, i.e., the monetisation of T-Bills, with continued reliance on repos in the range of US$ 250 billion per night.

Of course, should the Fed threaten to pull even a bit more liquidity than the market is happy to sacrificing, in that event, stocks and housing will turn down. The flip side too: as long as the Fed keeps growing the balance sheet at a rate of about $100 billion per month, the market melt up will continue.



Market melt-up and meltdown

Explicitly: Market melt ups can result in increases of anywhere from 20 to 100% plus for major market indexes. As, in a market “melt up”, investors are buying first and thinking later. Contrary; In a market meltdown, investors look for any reason to sell. The attitude is sell first, think later.

The undertaken action marks the Fed’s latest response to a shortage of cash reserves that developed last month and caused short-term interest rates to spike, briefly sending the Fed’s benchmark rate above its target range. The New York Fed said its first monthly purchases, will total $60 billion. Future amounts weren’t specified. The Fed also said it will extend a separate short-term lending operation through January, and if necessary longer, that also has the intention to boost bank reserves.

At the time, many critics feared that the purchases, known as “quantitative easing” or QE, would stoke rampant inflation. That fear proved unfounded. Fed officials consider those earlier bond-buying programs to have largely succeeded. Still, some critics charge that by leading more investors to buy stocks, QE contributed to higher stock prices that disproportionately benefited wealthier individuals, while leaving lower-income people with measly savings rates.

Everything is a bubble and the worst-kept secret in the finance sector has been officially confirmed: The U.S. Federal Reserve is inflating said bubbles via more quantitative easing on the repo market. The hard part is determining when said bubbles will blow up in all our faces and the greatest recession in history crushes the U.S. because the Fed, lowered its benchmark interest rate three times in 2019 while the economy was strong – which is the opposite of sound monetary policy – taking away the last crumb of ammunition.

Substantiating, for many meanwhile obvious; the central banks’ experiment has been a big failure. And yet, it looks like low interest rates aren’t going away anytime soon. Replicating this failed policy won’t fix the economy. It will only steer it toward a gigantic crisis.



Summary

Suddenly, the normal lenders – many of them foreigners – were unwilling or unable to cover U.S. deficits. The Central Banks had to choose. It could inflate, or it could just let markets do their work. – But, the agenda had previously been set, as the strategy is single-minded, the Central Banks’ fate – and ours, too – is sealed. It’s “Inflate or Die.” There’s no other way.

And if there was ever any doubt about it, it would have been already resolved in September, 2019, when liquidity dried up in the “repo” markets, the most important exchange of lending markets. The rate to borrow overnight spiked to 10%, when the Fed had to come to the rescue. Then, it begun pumping billions of dollars into the repo market every night in a row, that had to be continued to keep the Rothschild central banking system upright.



They don’t want to recognise: The foundation of any stable currency is nothing else as being supported by valuable reserves. It is a requirement for the future of any currency and of vital importance, to secure the national wealth even in rough times.

The situation has turned so bad that even hedge funds are in a downward tail spin, as many now have blocked investors from withdrawing their money. The central banks are preparing to infuse these institutions with super low-cost loans to bailing them out, of course at tax payers expense. The final question to be answered is: When the repos prove to be insufficient, what will happen next?

The solution is simple, the implementation of GESARA, introducing asset backed sovereign currencies.

Since this article is for many citizens an eye-opener, share this expos̩ with others. FWC-articles are now read and listened to worldwide through various channels and sites in many different languages. There are at least a million awakened people who have become frequent FWC-followers. Help increase this awareness by sharing any FWC-article. РWith FWC-source acknowledgment: Reproduction in other languages, sites, or forms is permitted. The goal is to awake as many people as is possible, because that will prevent chaos when the truth is coming out.
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Operation Disclosure: Repo Markets in Panic: Summary
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