$175 billion just printed and the Bitcoin price goes down! - page 5.

o_e_l_e_o

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Quote from: fillippone on September 19, 2019, 08:26:07 AM

The point that it hasn't been necessary since 10 years has no implication whatsoever for financial stability.

I'm not so sure about that. The Fed having to do this to such an extent suggests a lot of banks are not meeting their fractional reserve requirements. Banks are no long funding their own debts with their own deposits, and instead they are relying on the federal reserve to bail them out on a nightly basis. Something has changed recently (we don't know what) to force the federal reserve to come in with $75 billion on a nightly basis to support the banks.

Banks should be able to support themselves. If they are experiencing daily shortfalls, then it can impact on other lending, which can impact on the entire economy. The Fed having to bail them out like this is a bad sign.

carter34

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I think it is, I don't expect price to fall this time when it is beginning to get some positive move. I will rather keep hodling.

Quote from: tonyvo2017 on September 19, 2019, 04:17:17 AM

No, I don't think this is a trap. because I see that this is the rule of the financial market. In which markets are beneficial, the whales will usually go there and eat their prey, after the food runs out, it will return to the starting point.
This is also a good signal to buy more bitcoin and hold, it is about to grow again!

You said no to the question but what you have written deduced that it is a trap.

fillippone

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Investors are smart, and they do know what bitcoin is and how it could be used by them.
They perfectly know how a decorrelated, high volatility asset could fit in their portfolios (here a post detailing in a simple way why the're looking so attentively to bitcoin in their portfolios..
The point is they cannot get exposure to bitcoin, even if they want to.
They cannot buy bitcoin: it is not on the investment mandate of 99% of the investors on the streets. They simply cannot touch it.
This is why a tradable form of bitcoin, say BAKKT or some sort of Exchange Traded Fund (or any other listed alternatives, OTC trading is not a viable options for many, as SolidX fiasco showed) is so important to get money inflows from institutional investors.

Lucius

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Quote from: Kakmakr on September 19, 2019, 02:54:49 AM

The warning signs are there that the government is trying to rescue Bond markets and the whole lending system in the USA and in times like this, smart investors should rather pull their investments and look for safe havens.... but they are doing the opposite. Why?

Maybe because they're not smart, or they don't even understand what Bitcoin is? Or they stick to traditional "safe havens" like gold which goes high close to $1500 per ounce., or maybe they like to invest in bonds with negative-yielding which has increased almost three times in just a year to $15 trillion. Smart investors like to play with trillion $ markets, and Bitcoin is just under $200 billion today.

I would say that this printing is not couse of recent very small dip of some $300, it's something that's been happening constantly in recent months.

fillippone

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It doesn't work like that, you cannot add the amounts like that as they are Overnight Repos: so the FED prints money in the evening, and destroys it the morning after. It is due to balancing banks reserves in the system to counteract to temporary imbalances.
So now (19 september 2019) they printed only 75 until tomorrow morning.

They did it several times in the past few days:

53 BLN on Tuesday 9/17 to 9/18
75 BLN on Wednesday 9/18 to 9/19
75 BLN on today 9/19 to 9/20

Here you understand the amount of money created is the same and equal only to the currently live operation.
It's part of the job of any central bank. The point that it hasn't been necessary since 10 years has no implication whatsoever for financial stability.

Explainer: The Fed has a repo problem. What's that?

Quote

In a repo trade, Wall Street firms and banks offer U.S. Treasuries and other high-quality securities as collateral to raise cash, often overnight, to finance their trading and lending activities. The next day, borrowers repay their loans plus what is typically a nominal rate of interest and get their bonds back. In other words, they repurchase, or repo, the bonds.

The system might be rotten, but this one is not a proof of that.
For sure I can't see why bitcoin should rise on this particular news.

cosmofly

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Quote from: Kakmakr on September 19, 2019, 01:59:56 AM

This is really amazing, the Federal Reserve just printed some more toilet paper money and injected it into the financial market and the Bitcoin price takes a 5% nose dive. Roll Eyes

How gullible are the investors that they would be willing to pull money out of their Bitcoin investments to fund investments in the over inflated stock markets. Roll Eyes

I think this is just another Bear trap in the making, because we all know what is going to happen on the 23rd of September, when Bakkt is going live!

Let's stay calm and ride this out, because I am definitely not going to sell my coins to greedy scumbags, who are just into Bitcoin for the quick profits. Angry

Do you think this is a Bear trap? Let's discuss...... Tongue

This is not a bear trap, because this decline has not yet been called a bear, it is only a slight decrease as the stock market has more potential in the short term.
Don't worry, when the stock market gets less busy, those investors will return to Bitcoin and pump its price up. Keep holding !

tonyvo2017

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No, I don't think this is a trap. because I see that this is the rule of the financial market. In which markets are beneficial, the whales will usually go there and eat their prey, after the food runs out, it will return to the starting point.
This is also a good signal to buy more bitcoin and hold, it is about to grow again!

Kakmakr

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Quote from: o_e_l_e_o on September 19, 2019, 02:33:07 AM

I thought it was $75 billion? Do you have a source for $175 billion?

I've not had much time in the last few days to read about this properly, but I'm pretty sure this money is bought back the next morning. If there is a shortfall of cash, the Fed will spend money in cash to buy assets from banks, and then the next day the bank will buy back its assets form the Fed. This isn't really printing money in the sense we usually think about - this is money the Fed was already holding, and which will be removed from the monetary supply within 24 hours (actually, slightly more will be removed because the Fed charges the bank interest on this deal).

That's not to say that fiat isn't a sinking ship, and more money is printed over time as and when the banks or the Fed fancy, but this isn't that. This is, however, the first time the Fed has had to make one of these deals in over 10 years (from what I've read), so it is certainly another indication of the strain on the markets and potentially another impending recession.

The press are playing with numbers --> https://markets.businessinsider.com/news/stocks/fed-repo-injects-billions-into-market-first-time-in-decade-2019-9-1028534289 " The central bank has injected a total of $128 billion into markets — $53 billion on Tuesday and another $75 billion on Wednesday. " ... but the amount is not the main issue now, rather the fact that they are doing this again after 10 years. Roll Eyes

The warning signs are there that the government is trying to rescue Bond markets and the whole lending system in the USA and in times like this, smart investors should rather pull their investments and look for safe havens.... but they are doing the opposite. Why?

o_e_l_e_o

legendary

Activity: 2268

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I thought it was $75 billion? Do you have a source for $175 billion?

I've not had much time in the last few days to read about this properly, but I'm pretty sure this money is bought back the next morning. If there is a shortfall of cash, the Fed will spend money in cash to buy assets from banks, and then the next day the bank will buy back its assets form the Fed. This isn't really printing money in the sense we usually think about - this is money the Fed was already holding, and which will be removed from the monetary supply within 24 hours (actually, slightly more will be removed because the Fed charges the bank interest on this deal).

That's not to say that fiat isn't a sinking ship, and more money is printed over time as and when the banks or the Fed fancy, but this isn't that. This is, however, the first time the Fed has had to make one of these deals in over 10 years (from what I've read), so it is certainly another indication of the strain on the markets and potentially another impending recession.

Kakmakr

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This is really amazing, the Federal Reserve just printed some more toilet paper money and injected it into the financial market and the Bitcoin price takes a 5% nose dive. Roll Eyes

How gullible are the investors that they would be willing to pull money out of their Bitcoin investments to fund investments in the over inflated stock markets. Roll Eyes

I think this is just another Bear trap in the making, because we all know what is going to happen on the 23rd of September, when Bakkt is going live!

Let's stay calm and ride this out, because I am definitely not going to sell my coins to greedy scumbags, who are just into Bitcoin for the quick profits. Angry

Do you think this is a Bear trap? Let's discuss...... Tongue

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