The Only Thing That Really Matters

Below is a my ad nauseam repeating of my prior warnings now going on years and as recently as a few weeks ago...

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?

And here is last Friday’s updated chart that goes along with it, To wit:

On Wednesday the Federal Reserve will conclude their latest conclave and render their assessments and decision on whether or not to cut rates and by how much. Here’s what I’m going to stress, and keep on stressing ad nauseam…

If the Fed does not immediately halt their QT operations (quantitative tightening). The entire financial system is at risk of breaking. The above chart shows just how little (it’s close enough to imply the term Zero) liquidity there is to allow the system to function as everyone believes or is intended.

Again, to repeat ad nauseam, the above facility was utilized and grew because there was a crisis of such liquidity and the entire system was at risk of coming apart just a few years ago. I said then, as I say today, the Fed has not fixed anything and all there has been is an illusion of fixed. And when it starts to break once again, this chart will show that all the supposed “We know what we’re doing! balance sheet run off” was merely an illusion and talking point and will need to be reversed with vigor.

You may see the direct evidence of my assertions after this meeting or, not far from it.

As always, we shall see.

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