Topic: 2022 summer fed stop repo (Read 127 times)

The Federal Reserve is not the entity that borrows. It’s the entity that BRRR-prints money into existence. It’s the U.S. Government that borrows, through the treasury. They issue debt which is bought by the Federal Reserve with money issued straight from the printer.

USA will never default, they are just way too powerful to do that, those are the things little countries do.
Even with this high HUGE inflation going around, they are still doing fine and they will keep being fine as long as they are as powerful as they are today.

People could mock them, hate them, find them primitive, and all the things like that but it doesn't change the fact that they are very powerful and have the chance to raise the debt ceiling to 50 trillion if they want to and nothing will change.

This is why they will not default; they will not have a problem, they will just keep on racking brand new debt without worrying about the future at all.

A lot of money has been flowing into markets and the fed has been borrowing a lot for sure and I think this could be devastating once it all collapses. What the fed wants is stability and with what they are doing, I don't think it can hold up to what they want. I hope no one gets so lost with their life savings here and be smart and use crypto. Let's see what happens in the coming months.

It's currently a complicated situation. It's because currently, simply raising rates would risk the U.S. government to default. In the yearly national budget, 10% of that is paid as interest to the Federal Reserve. That's at current interest rates. Increase interest rates to 3%, it would surge to more than 60% of the national budget.

In context, to fix inflation Volcker raised interest rates up to 20% during the 1970s.

Yeah, well, I've heard that story before.

The Fed will do whatever it takes depending on the circumstances. They are announcing that now because they are seeing the clear inflation and they hope with the announcement they can moderate it a little bit, but if by stopping printing bills and buying in the repo market there is a clear economic slowdown, they will go back to printing.

I think they are in a dead end. What Nixon did worked for decades, like ponzi schemes that always work for a while, but there comes a time when the bubble gets so big that whatever you do it will burst.

Six, seven months?  It's not that far away, though the weather in my area would suggest differently.  And given that we're talking about the government, which moves slower than ice-cold molasses, it's almost the blink of an eye.

That's definitely true--and I don't expect the US government to let itself go bankrupt and thus become the laughingstock of the world.  There are so many tricks those idiots in Washington can pull in order to avert that possibility, though I hope they don't plan on starting a world war or something like that.  I'm not sure how much of a warmonger Joe Biden is, because he seems to be more like the "Uncle Joe" type, who likes to give away money and so forth, but that doesn't mean he isn't as devious as any other US politician.  You'd kind of have to be to have survived as long as he has in US politics, you know?

That was one of my first thoughts, though it does make me wonder why a pronouncement like this would even be made if the US wasn't in trouble and could count on an easy solution like printing more money--which is part of what got us into this situation in the first place.  All the stimulus checks and other forms of free money that the Federal and state government have been giving out might have stimulated the economy, but just look at where inflation is at the moment.  It makes me wonder who the hell is monitoring all of this and if they need a new pair of glasses.

I'm still waiting for the platinum trillion-dollar coin collectible

OP, No. The debt ceiling will be raised, the BRRRR-money-printer will be used. The Federal Reserve will not do what Paul Volcker did during the 1970’s because in 2020’s, the U.S. is under different circumstances. I will post a topic about it soon, it’s a long explanation.

Economic crash ?
If so how it look like ? Since no money the crash takes also money expenses to pay shorts.
Rather...crypto might stabilize no up no down movements of prices in times of crisis.

Summer 2022 is far away.

There's no guarantee the united states won't default, rather than raise the debt ceiling higher by its deadline on december 15th 2021.


The fed says something one day, and does the opposite the next. Who knows how much their policy will change by summer 2022.

All market and policy fundamentals appear to project price hikes, rather than the opposite.

I think most will prepare for a worse case scenario, rather than a best case scenario. Maybe that's wishful thinking on my part?

2022 summer fed stop repo.
What happens next ?
98% price drops ?