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REPORT COPYRIGHT VIOLATION IN REPLY
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Message Subject
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BREAKING: The Fed is sharply increasing the amount of help it is providing to the financial system
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Poster Handle
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Anonymous Coward |
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Post Content
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Who the hell is receiving all this money that is
created out of thin air????
:bf12:
Quoting: Trained Noticer That's not how it works. The money is very real. This is how it works - Banks have to have a certain % of cash to assets at the close of a day's trading. That's the law. If they don't have enough cash they go to The Fed (The Bank of Last Resort because banks won't lend to each other) and they borrow the shortfall in the form of an overnight 0% loan to be paid straight back when the bank opens in the morning. This is mainly happening because interest rates are so low that banks aren't making as much cash as they used to do. While this is a piece of the repo market it is not all. Repo market also exchanges for longer terms such as 3 months etc.. This is not entirely about overnight cash requirements. Some institutions, banks, wealth funds, etc.. are unloading assets for cash. When you figure out who, the terms, and how much, then you can guess as to why.
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