Fed Injects $17 Billions in the Night Banking System for the Day

[Igor Pereira]

" It's probably nothing..."

Ladies and gentlemen, the break is over. After a week of relative silence in the financial "passing", the signs of bank stress returned with full force on Monday.

By Igor Pereira

While the media focuses on the maxims of the scholarships, the desk Federal Reserve had to intervene yesterday, December 15, with a massive liquidity injection of almost US$ 17 Billion via Repo operations (Repurchase Agreements).

Analyzing the official report of yesterday's operation, the details are revealing and worrying:

1. The Total Value: A total of $16,801 Billions in guarantees in exchange for immediate cash (Overnight).

2. The Composition (The Red Alert):

   • Treasures: $5,201 Billions.

   • Mortgage backed securities (MBS): $11.6 trillion.

The ExpertFX Analysis: The fact that most of this injection ($11.6 Billions) be supported by MBS (Lastrated Titles in Mortgages) is critical. This suggests that banks are desperate to turn their illiquid real estate assets into cash (Box) to close the balance sheet of the day. They're using the Fed disguised "discount window" to get liquidity that the private interbank market isn't providing.

As we were warning, the mechanism of Reverse Repo (RRP) It's dry. Without this safety mattress, any extra cash need by banks immediately becomes a financing crisis that forces the Fed to intervene.

• A $17 bi injection in a single day is not normal in a healthy system.

• This confirms that the quantitative tightening (QT) broke something behind the scenes. The Fed is now forced to provide oxygen (money) to prevent the patient (regional banks and dealers) suffer cardiac arrest.

For the investor, the translation is simple: Liquidity is increasing forcibly.

• Dollar: More dollars being created/injected weaken currency purchasing power in the long run.

• Gold and Silver: Confirmation that the system needs "equipment" to breathe validates the protection thesis. If the Fed needs to print $17 billion today, how much do you need tomorrow?

Stay tuned: If these operations continue to grow throughout the week, we will be facing an unofficial but very real EQ.

---

The system is warning you. Protect your property.