Reverse Repos will stop the coming inflation???? Say What?
Submitted by Treg on Wed, 09/23/2009 - 10:49
in
What is the history on ‘reverse repos’…?.... and why did not Paul Volcker use them in 1980 to stop inflation if it was an “available tool” of the Fed? Or did he?
This question is reference to the article here: http://www.bloomberg.com/apps/news?pid=20601087&sid=ax.FBWNL...
If its true that the Fed can drain one trillion in excess money in the financial system, then so much for Peter Schiff and Jim Rogers and many others who scream that inflation is coming..... and if the Fed cannot .... they are heros.
In peace & liberty,
Treg
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Porcine purses
If the Fed does reverse repos for T-bonds, it will wind up with nothing but toxic waste on the asset side of its ledger. And what happens when the repos mature? The bonds will almost certainly be worth a lot less (because interest rates will have risen). Will they continue to renew the repos, losing money every time they roll them? Or will they try to sell the other worthless junk they hold?
They bought a year's output of sows ears and paid silk purse prices. They are stuck with sow's ears, and there's no way around it.
hahahahahahahaha
im rolling on the floor in laughter. the fed has never drained anything this is not volker or the 70's when he raised rates. who is gonna buy the crap on the fed balance sheet and if the fed drained all that liquidity in a debt system where there it is not self liquidating as in collateral the system would tank over night. why do you think the market is rising in the worst economy ive ever seen in 52 years on this earth its all inflation. the liquidity is finding a home in the stock market but its also finding a home in gold and oil.
Stimulus: How Fast We're Spending $792 Billion
Running Tally:
http://projects.propublica.org/tables/stimulus-spending-prog...