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LINKS FOR ADDITIONAL READING FOR THIS VIDEO & ALL INFO IN TEXT DOWN BELOW:

What is a Repurchase Agreement (aka Repo): https://www.investopedia.com/terms/r/repurchaseagreement.asp

Why the Fed’s recent repo is a big deal: https://www.reuters.com/article/us-usa-fed-repo-tools-explainer-idUSKBN1W30EJ

Nik Bhatia Tweet thread: https://twitter.com/timevalueofbtc/status/1174335720242077699

Zerohedge update 1: https://www.zerohedge.com/markets/fed-has-lost-control-rates-again

ZH Update 2: https://www.zerohedge.com/markets/fed-funds-prints-230-breaching-target-range-libor-replacement-soars-remarkable-525

ZH Update 3: https://www.zerohedge.com/health/fed-begins-repo-operation-funding-rates-ominously-elevated-across-board

ZH Update 4: https://www.zerohedge.com/economics/watch-live-fed-chair-powell-defend-dovish-bias-stocks-jobs-inflation-economy-soar

ZH Update 5: https://www.zerohedge.com/markets/powell-confirms-qe4-coming-just-not-today

A repurchase agreement or repo as a form of short-term borrowing for dealers in government securities.
Repurchase agreements can take place between a variety of parties. The Federal Reserve enters into repurchase agreements to regulate the money supply and bank reserves.

Because repos occur quite frequently between banks and the US Treasury, it is the base layer for much of the U.S. financial system, they provide banks with the liquidity needed to meet their daily operational needs and maintain sufficient reserves.

As was explained earlier, the Fed only enters into a repo in order to regulate the money supply and bank reserves. Basically, when the Fed has to get involved, it’s because cash reserves in banks are running low. When this happens, we often can see increased borrowing costs means less people can afford to take out loans, less credit issued can lead to a credit freeze and the U.S. financial system relies heavily on the flow of credit. To put it plainly, a credit freeze is a big problem.

Let me remind you that the last time a credit crisis occurred over 10 years ago, there weren’t a whole lot of options for people to run to in an effort to find monetary sanctuary. In fact, the last time we experienced a world wide financial crisis, it sparked the creation of cryptocurrencies. Digital currencies that are not subjected to the arbitrary whims of a particular government or central bank. Some of which were designed specifically to address the issue of dealing with debt, with an inflating money supply, with the always opaque and questionable motives behind certain economic policies. Bitcoin and cryptocurrencies have benefitted from global economic turmoil in the past, but those past situations can certainly pale in comparison to what might transpire in the future.
I think investments like precious metals and cryptocurrencies will see a surge if these red flags aren’t quelled very soon. Perhaps finally those who have been skeptical of the world of cryptocurrencies will be forced to have an open mind for their potential of serving as an oasis in unstable times. Perhaps the tables will finally be turned and the transparency, immutability and decentralized nature of things like Bitcoin will shine compared to the dark times that the greedy central bankers have caused.

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27 COMMENTS

  1. This may be a dumb question, but there are no stupid questions, just stupid people. ? If crypto is a global thing, why does the US economy have so much impact and influence?
    Thanks

  2. This is one of the most important videos of 2019, and we don't even know it yet. Thank you once again for a great morning deep dive, take the time to connect with others peer to peer. It's very important to see where others are at in their journey, in this age we can't miss an opportunity to learn!

  3. Thanks for a thought provoking video. It is quite clear that the global economy is rapidly slowly. Central banks across the world are slashing interest rates and resorting to a variety of stimulus measures in a desperate attempt to stave off the end of the of this business cycle and a recession. The Fed has just cut rates again along side the ECB which has just cut rates, announced more QE and just given 3.4 billion euros to banks in an effort to prop them up. Many big investors are getting out of stocks and hoarding piles of cash while some are getting into gold hence its rise from 1250 to 1500 over the last 3 months. It will be interesting to see how investors and ordinary people react to the next recession. Will they wake up to the potential of crypto and invest in the space. Only time will tell.

  4. Id wait for btc bottom. I think we are at least headed for 7000s. I think alts sputter and fall. I would short alts but Im in gold and silver. You have a beautiful voice . You can move here to monkey island with me any time and of course thousands and thousands of monkeys over which you would be queen, They would still run away with your food though .

  5. FYI
    Bitcoin is not BTC… Bitcoin is BSV.
    Bitcoin is a SYSTEM which has very specific working principles (please read and study the Bitcoin white paper) which BTC no longer has/follows. In order for Bitcoin to be sustainable, it needs to be USED… on-chain. Not using Bitcoin system and going off-chain, you are going out of Bitcoin (cough**Lightning**cough) and lastly, the value is not in the "coin" but in the NETWORK, its not scarcity of BTC that gives it value, but what you can use it for, and you people are yet to catch on about all this, because your greed has got you manipulated so easily.

  6. The FED stopped your '08 Recession from becoming a Depression you idiots. Last time a depression occurred. 3 Million Americans died of hunger! Wanna guess what another one would do you? Lets not wish the worst for the rest of humanity just because we managed to secure ourselves a Life Raft called Bitcoin, which I believe in.

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