You Should Now Be On Watch: Because Something's About To Break, Somewhere

I have been calling attention to the Fed’s Overnight Reverse Repo Operation for years, saying: The closer the Fed allows this to get to zero – the more dramatic the sudden liquidity crisis it compels will explode. And for those same years – it’s been all to deaf ears. Why? Easy – nothing had happened yet, therefore, why worry, nothing probably will because The Fed obviously knows what they’re doing this time. right?

Ahem. Yeah, sure they do. But I would strongly suggest one should take heed at this time, because…

Last night (Tuesday) here’s the current liquidity level reported. To wit:

As I have stated far too many times to count: It will be issues with this facility, specifically, that will be your first sign that the Fed will suddenly have to reverse course on everything they said they were sure they’d not have to do again – with gusto.

As always we shall see.

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